How to Prevent ERP Software Implementation Challenges
Why do so many Enterprise Resource Planning (ERP) software implementations fail?
Many companies are asking themselves this same question as they weigh the decision of whether or not to invest in ERP software. While the benefits of ERP software, such as Sage 100 ERP (formerly Sage ERP MAS 90 and Sage ERP MAS 200), are promising, recent research has shown that the majority of ERP software implementations result in failure. Why?
According to a recent Panorama Consulting ERP Report, budget overruns and lengthy implementations delays largely contribute to ERP software implementation failures. However, while it is certainly true that companies have a tendency to run over budget and experience significant time delays, the real reason so many implementations result in failure is due to unrealistic expectations. These unrealistic expectations can cause companies to become dissatisfied with their ERP projects, dooming them to failure from the start.
So how do you prevent these unrealistic expectations? Companies can prevent these unrealistic expectations by doing the proper research prior selecting ERP software. It’s important to talk to software vendors and gain a realistic understanding of the ERP process, as well as talk to other businesses who have recently implemented ERP software systems. Identifying your business needs is also crucial, for you will need to choose ERP software that is capable of delivering upon those needs.
While you cannot prevent all of the challenges that come with an ERP software implementation, proper planning can certainly make the process easier. Keep the following strategies in mind as you consider your ERP software solution and the upcoming implementation:
- Define clear and concise goals for your ERP project.
Many companies begin looking for ERP software solely for the reason that their current system is outdated or has discontinued vendor support. While these are certainly good reasons for investing in new ERP software, these cannot be the primary reasons for your ERP investment. Look beyond your current system and identify your business needs and the goals you are trying to accomplish. These can be anything, such as reducing inventory levels or increasing customer satisfaction rates.
- Write out your business requirements.
While many companies choose to do this step after they’ve selected a software vendor, it’s important to write down your business requirements before you begin even looking at vendors. This will help make your ERP software evaluation more thorough and will help ensure you understand what exactly it is that you’re buying. As you are creating your business requirements, make sure that you are focusing on defining your business processes, both currently and for in the future. It’s also beneficial to involve your front-line employees (in addition to IT personnel and company executives). Front-line employees can give upper management valuable insight and highlight needs you may have never been aware of since they know the processes better than almost anyone else.
- Select the right ERP system for your business needs.
Don’t choose ERP software based on what is popular or by what the competition is using. Make sure that the system you choose is designed to meet your company’s specific needs. Ask detailed questions – don’t just look for “yes” and “no” answers. The more information you have about an ERP system, the more likely you are to make the right decision the first time.
- Set realistic expectations for implementation.
Talk to someone who has been through the implementation process and understands ERP implementations. Compare your project against similar projects in size and scope to gain a realistic picture of what to expect. As you are setting your expectations, don’t forget to address other non-technical needs, such as user training, process workflow definition, and change management. These are just as important to your ERP system’s success as the actual implementation.
- Involve management and key employees in the ERP implementation.
Involve everyone who will be using the ERP software, not just IT personnel. In addition to upper management, make sure front-line users and other key employees are involved throughout the entire course of the project.
- Develop thorough processes and workflow.
While many companies opt to address this after the software has been chosen, it is beneficial to develop these processes and workflows during the evaluation stage. In order to know how your ERP software will benefit you, you need to understand how the information will flow throughout your business.
- Outline business benefits to measure ERP success.
Rather than simply creating a business case for ERP software, it is valuable to list the benefits you expect to receive from such a system. Don’t focus on simply receiving the “go ahead” from upper management. Make sure that you outline the benefits you expect to receive from the ERP system so you can adequately measure your results after implementation. Identify where and how you will obtain these benefits and make them realistic, measurable, and actionable.
As you can see, ERP implementations require thorough planning and evaluation. Knowing what your business needs and how you expect to meet those needs is critical to your ERP system’s success. Mindover Software can not only help you identify your business needs, but we can also help you find the right ERP software to help you achieve your business goals. Contact us today to set up a business software consultation and let us help you achieve ERP success.