When we talk about ERP implementations, we prefer to focus on all the ways that you can make your project successful. We’ve shared strategies to implement, tools to invest in, and steps to take to optimize your chances of success.
However, achieving the outcome you desire also means knowing how to avoid ERP failures. While it’s not as fun to discuss ERP implementation pitfalls, it’s a necessary part of the equation.
Why do ERP projects fail? How can you avoid those same roadblocks as you begin your own implementation? Today, we’re taking a look at some common issues that occur.
5 Common ERP Implementation Pitfalls
1. Poorly Defined Goals
You’ve heard us stress the importance of project planning. As you prepare for ERP selection, there’s no step that holds more importance. If your goals and initiatives are not clearly aligned from the beginning, every other part of the project will be off-kilter.
An ERP system isn’t a magic solution to all your problems. However, it can help you unlock new efficiencies, automate your routine processes, and free up your employees to focus on mission-critical work.
To reap those benefits, you must know where your pain points exist and how you want to solve them. Business process reengineering is often the first step in this process.
As you uncover what’s not working, think about what needs to change and how you can get there. This will help you define your list of requirements that you need in an ERP system. Together with your project team, decide where you want to be and clearly document your future state so you have a cohesive roadmap.
Panorama recently worked with a manufacturing client and outlined specific goals that aligned with the company’s business requirements. Some requirements included sales operations planning (SOP) functionality, clear sale order workflows, and optimized customer fill rates to address demand-supply planning.
A Failed Payroll System Implementation
Panorama’s Expert Witness team was retained to provide a forensic analysis and written report to the court regarding the failed implementation of a major software developer’s ERP/payroll system.
2. Misaligned Solutions
As you begin the vendor demo phase of your implementation, it’s easy to get caught up in the bells and whistles that an ERP system can provide. Many organizations wind up investing in ERP systems that are either too feature-rich or not aligned with what they need. Project managers can lose sight of why they’re investing in ERP when they have an array of tech-savvy solutions in front of them.
While it’s important to keep up with what your competitors are doing, remember that your business is unique. Base your decision on your company’s specific needs, the direction you want your business to go, and your current operational requirements.
Panorama Consulting shows clients how their business requirements align with the functionality of various solutions.
3. Lack of Managerial Buy-In
An ERP implementation will require a significant amount of time, attention, and commitment from your employees. Sometimes, it may require them to work overtime, especially if they’re juggling project requirements on top of their day-to-day responsibilities.
However, they shouldn’t be the only ones putting in the effort. Your leadership team should also be fully engaged in the effort from the start. If they’re disengaged or too busy to focus on it, there’s a good chance the project won’t get off the ground.
Your project team will need strong support from your management personnel. The more actively involved they are in the project, the more likely your other employees will be, also. This can help you with your organizational change management (OCM) efforts lowering employee resistance and encouraging user adoption.
4. Lack of Organizational Change Management
When employees are faced with any type of change, it’s human nature to be suspicious and even resentful. Any time you introduce a new type of technology, you could encounter a degree of pushback.
By developing an OCM plan early, you can help address and eliminate these issues before they snowball.
Keep the lines of communication open, clear, and consistent. This means answering questions as they arise and remaining transparent about the project. You should also deliver regular updates, develop training sessions, and do whatever is necessary to support your team members as they make this transition.
Once the system is live, follow up with employees to understand their experience and track progress on any key performance indicators (KPIs) you set earlier.
One of our distribution clients saw several role and responsibility changes across their quote to cash process so Panorama developed an OCM plan and helped the client document specific changes so as to communicate them to employees.
5. Choosing the Wrong ERP Implementation Partner
As you roll out your ERP system implementation, the people you have by your side matter. This includes your implementation partner.
The ERP consulting company you choose should have extensive experience with the specific ERP system you’ve selected. It’s possible (and common) to choose the right ERP software but go with the wrong implementation team.
Before signing on the dotted line with a particular company, ask them to describe their capabilities in detail and make sure they have the bandwidth required to handle your project. Can they be on-call when you need them and are they ready to put in the work required to make sure your ERP implementation is a success?
It can be difficult to know the right partner to work with. A manufacturing company recently contacted us to learn about our services so it could determine an implementation partner approach: work directly with NetSuite, work with a NetSuite partner, and/or bring in an ERP consultant.
The right partner is a strategic ally that knows how to help you navigate every stage of your implementation, tailoring their approach to meet your unique digital transformation objectives.
Avoid These ERP Implementation Pitfalls
Deciding to begin any type of digital transformation might seem daunting. However, it can also be one of the smartest decisions you make for your organization.
The key to reaching your go-live date with ease is setting a firm foundation from the very beginning. When you know what to do and what to avoid, you won’t fall victim to the ERP implementation pitfalls described above.
Along the way, it helps to have a team by your side that knows how to optimize your opportunities for success. To learn more about Panorama Consulting and how we can help, contact one of our ERP implementation consultants today for a free ERP consultation.
