7 Alarming Signs of an ERP System Implementation Failure & Ways to Prevent it

August 6th, 2021 Intech Systems ERP

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.

About Intech

Intech Systems is a three-cloud Microsoft-certified partner that boasts deep expertise in providing digital transformation solutions for organizations by leveraging the Microsoft 365, Dynamics 365, and Azure solution stack. Intech is recognized as a top-tier Microsoft implementation partner globally and specializes in transformative technology solutions such as ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), Business Process Automation, Business Intelligence, Cloud Infrastructure, Data Management, Productivity & Collaboration and Generative AI (Gen-AI) solutions. As a trusted Microsoft Solutions Partner, we are capable of doing complex technology implementations catered to an organization’s specific needs & also rapid solution implementation such as our Microsoft Dynamics 365 Business Central implementation packages. We pair our implementations with end-to-end customer support, offshore development & 3rd party integrations. With offices in India, USA (United States of America), and Singapore, we work with clients across globe to empower businesses with cutting-edge technology solutions. Our latest services aim at delivering business ready AI solutions to the customer, like our  Microsoft Copilot Consulting Services & Solutions for small, medium & large enterprises. Intech’s expertise lies in building software solutions for Manufacturing, Professional Services & Healthcare.  Our Dealer Management System, Sales and Service CRM for Manufacturing, Field Force Automation for Pharmaceuticals and Manufacturing Central are some of our leading industry solutions. Intech’s vision is to catalyze digital futures for operation-centric industries globally, we are at the forefront of innovation, helping organizations drive growth and innovation like never before. Contact Us to learn more.