There are no hidden reasons for having an ERP system in the organization. We have already by far acknowledged the benefits of applying the technology in the business process. Ever imagined or experienced some bugs in the go-easy process ERP system? When recovering from a failed ERP implementation, the most common question organizations have is, “where we lacked?” Many organizations have failed to answer this question
It’s better to look after the root causes of failure in terms of the overall project execution.
Have a look at some precautionary root causes that should be on the list of the organization while implementing an ERP system.
Reasons for ERP Failure
1. False Defined Goals for the ERP Software
Very often various successful organizations have reviewed the ERP implementations as business transformation than technology projects. They believed that ERP systems have a huge impact on their business growth and are much more convenient than any Windows upgrade. Somewhere ERP implementations have a significant impact on employees, business processes, and the organization’s overall strategy.
However, many ERP consultants are observed to be more focused on technology rather than people and processes. In contrast, various research showed that software functionality is one of the least important processes for ERP success. So, it is advised to stop thinking so much about ERP implementations and start focusing more on people and processes.
2. Unrealistic Expectations
In order to avoid unexpected costs, various organization focusses on the cost-cutting and therefore, some ERP vendors low down the implementation cost and duration. This is where the ERP failure starts taking its bow with unrealistic expectations.
The SAP failure at Lidl demonstrates the importance of realistic expectations. The retailer defined strategic goals at the beginning of the project but didn’t consider the success factors necessary to achieve these goals.
3. Lack of Executive Buy-in
The executive team may have approved the project budget, but their job is far from over. They also need to form an executive steering committee to clarify the overall digital strategy and make decisions about resource allocation, timeline, budget, and benefits realization.
Executive involvement ensures the ERP implementation doesn’t become a technology project but fits into the organization’s overall strategy. This is important because organizations that use ERP software to enable a long-term digital strategy are more likely to realize benefits, such as improved customer service and sustainable competitive advantage.
4. Lack of Business Management Process
While working for/with a client, we help them in mapping their real-time state before selecting the ERP software. This allows and helps the organizations to define well-planned ERP requirements to share with ERP vendors and reveals the improvement opportunities.
Therefore, if your organization is simply moving to the ERP implementation rather than planning a digital transformation, it is recommended not to conduct the business processes further before ERP selection. Instead, it is highly appreciated to at least define overarching goals that will guide the choice of ERP software.
5. Resistance to Change Management
It’s organizational change management that can for sure prevent ERP failure. These organizations didn’t build a change management team and viewed change management as simply an end-user training exercise.
Organizations should invest in organizational assessments, employee communications, and customized training, that could ensure that their employees can effectively use the new ERP software or not.
6. Excessive Software Customization
ERP customization becomes a burden when you customize functionality that should be standardized. For example, many back-office processes are not competitive differentiators, so standard software functionality is usually sufficient. If employees are pressuring you to customize processes like this, it’s a sign of change resistance. We recommend decreasing the resistance instead of increasing the customization.
7. Underexperienced Resources
Make sure your systems integrator and ERP consultant, both should be experienced in ERP integration. An experienced ERP consultant within the industry is well aware of the challenges your organization might face and can ensure successful access with the right expertise.
How to Prevent ERP Failure?
The prevention of ERP failure is possible with ease by just have a keen observation for warning signs. If any of the above issues are fund-relatable, then it’s obviously not too late to change the process.
An organization should move with the best possibilities and careful consideration of all angles for successful implementation. Teaming up with experienced consultants is the best solution to void any inconvenience while implementing the ERP software. Let Intech Systems be your tech partner to guide you through the ERP successful implementation.