How to Avoid a Failed ERP Implementation
Installing an entire ERP system at your company is no small feat. It requires a large investment of both time and money. With the stakes so high, how do you protect your investment and ensure success? How do you avoid a colossal failure?
A good start is knowing what pitfalls to avoid. Here are five common reasons why ERP implementations fail:
1. Unrealistic Timeframe
It’s easy to underestimate the amount of time it takes on the client side to implement an ERP system. For an implementation to be successful, the company’s internal team must be involved in every step of the process just as much as the partner doing the actual implementation work.
Sometimes clients fail to realize that if they’re working 40 hours a week and they want to put in a new system, they have to either offload work they’re doing or work more hours. They can’t do their regular job plus configure a new system.
One of Boyer’s successful clients actually hired two temp people to help with the daily work to give themselves space to focus on the implementation.
2. Undefined Internal Processes
Clients may also underestimate the number of decisions they have to make and the work that goes into making each decision. This is especially true when they are attempting to explain to the implementation partner how the company works.
The staff is sometimes for the first time documenting their processes. For example, you might have three staff members in a room and none of them really knows exactly how purchases get approved, step by step.
These processes need to be documented for the partner to better understand how the business works and how to configure the system to those needs. If those internal processes are not properly defined, the new system will not work the way the company needs it to work.
3. Lack of Commitment to ERP Implementation
To implement a new ERP system successfully often requires a company to change the way they do some things. If you do steps 1, 2 and 3 in one package, a new package likely does it differently and sometimes people just don’t want to do that.
Your project champions will likely be willing to change, but the bulk of your users typically do not want to change. In the worst case scenarios, this inflexibility can kill the project.
4. Lack of Project Management
Like with any project, proper management from beginning to end can make a huge difference in the success of the project. To that end, Boyer now has a staff member devoted specifically to this aspect of our large implementation projects. Check out this series of blogs on how project management affects ERP.
5. Rushed go-live date
This is a big contributor with a long-term impact. Rushing a go-live date often means you’re skipping important testing that can find mistakes and fix bugs before the system goes live. A rushed go live makes the implementation much more stressful and difficult than it needs to be.
Even in subtle ways a rushed go live can have impact in terms of buy-in with the system. If people don’t trust the system from the beginning, it’s hard to get that back.
On the flip side, delaying your go-live date can actually be beneficial to the company. Boyer delayed one client an entire month and that made a huge difference because they had no issues. Even though it went live over the Fourth of July weekend, which no one wanted to do, they did it and everyone was still able to go home and enjoy the Fourth of July. It wasn’t a panicked go live. It was a very smooth go live.
How bad is it really?
A failed implementation at its worst can jeopardize the business itself. Ultimately if you can’t bill your customers and you can’t pay your vendors, you’re not in business long. That’s the extreme case.
More commonly, it means everybody is working harder and longer. Everything takes longer. Instead of an eight-hour day all of a sudden your entire staff is working 10-hour days and everything starts to get backed up.
Failed implementations can also affect your ability to get the reporting you need, the analysis required to make good business decisions. You need to have accurate and timely information in order to make the best decisions for your company, and a failed implementation can greatly affect your ability to produce that data.
If your company has suffered a failed ERP implementation, you may be working overtime to find workarounds to fix multiple issues. You don’t have to suffer forever. You can overcome a failed ERP implementation!