When an organization is ready to begin ERP implementation, they are understandably apprehensive. One of their top worries typically involves systems integration.
How will the new ERP solution interact with our existing systems, and how will we ensure data integrity?
This is a valid concern because even when carefully planned, systems integration is full of risks. A certain amount of apprehension is necessary to prevent these risks from undermining your project.
Today, we’re sharing a few system integration risks that could lead to data issues and ERP failure if unaddressed.
8 ERP System Integration Risks
1. Underestimating Project Risks
Unless your company has recently completed a similar technology project, you may not fully understand how far your effort could veer off track. You may even scoff at ERP vendors and systems integrators that include robust risk management plans in their proposals.
While you can save money upfront by selecting a provider that proposes a more bare-bones approach, you could end up spending much more money if something goes wrong down the road.
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2. Overcomplicating Your Approach
Typically, a big-bang ERP implementation is one that integrates all your systems during one project phase. While it can be effective for some organizations, it can also be overly complicated. If even one issue occurs, it can affect data integrity across all your systems.
Instead of trying to integrate everything at once, focus on quick wins that you know you can achieve. Over time, your team will get stronger and more capable, and you’ll be ready to tackle bigger milestones.
3. Committing to an Unrealistic Schedule
Naturally, you want to get to the finish line as soon as possible, but don’t set yourself up to fail by shortening the track. An unrealistic timeline is one of the top ERP failure reasons.
An aggressive rollout isn’t always a red flag, but don’t agree to one that will strain your resources. Work with your project team to clearly understand how much time you should allocate to each part of the integration effort.
4. Blindly Trusting a Firm-Fixed-Price Contract
One common misconception is that firm-fixed-price (FFP) contracts are some of the lowest-risk agreements around. In reality, these can make your project riskier.
By narrowly focusing on cost and schedule, your systems integrator may ignore other parts of your project, including operational risks. In some cases, they may even make decisions or take actions solely based on your budget or timeline, ignoring blatant issues that could lead to data inconsistency and major operational disruption.
5. Experiencing Staff Turnover
Any time there is a change in your project team, the implementation could suffer a setback. This doesn’t just apply to project managers, but turnover of anyone who is directly involved in the effort can make it difficult to effectively integrate your systems.
While you can’t guarantee that everyone will remain at your company for the duration of the project, you can lower this risk by being proactive. Before you begin systems integration, get written commitments from all participants. Make sure they’ll be able to be involved for the duration of the project before they agree to work on it.
6. Waiting Too Long for Testing
When it comes to system integration, it’s critical to catch issues early. This way, you can perform corrective actions before they snowball. In an ERP software implementation, this means testing early, and testing often.
If you’re concerned that this effort will take up too much time, keep in mind that there are ways to accelerate the process without sacrificing quality.
For instance, you can use test scripts and automated testing tools. This can expedite the process, while ensuring it’s thorough. Essentially, you’re creating a testing environment that allows for early, complete discovery of problems.
7. Underemphasizing Change Management
It’s natural to get caught up in the technical aspects of ERP system integration because it’s a highly technical endeavor. However, it’s important to focus on people and processes, as well. In other words, you should make sure your employees understand the upstream and downstream processes related to the data they manipulate.
This is important because improper handling of data affects multiple departments. A lack of knowledge or a lack of empathy on the part of one employee can cause headaches for employees in other departments.
Training employees on new processes and designating data and process owners can be helpful, but the other part of the equation is managing change resistance.
Most companies experience pushback and hesitancy during major transformations. You really can’t blame employees because you’ve reengineered their business processes or changed workflows that they know like the back of their hand.
To mitigate this resistance, we recommend ensuring your team members fully understand the details surrounding the project by investing in organizational change management activities, such as designating change champions.
Mitigate Your ERP System Integration Risks
This is an exciting time in the life of your organization, but before you move forward, consider the above factors and how they could influence the integration between each of your systems. Anything that risks impeding the seamless flow of data should be mitigated as soon as possible.
If you need help navigating these next steps, request a free consultation below. Our ERP consultants are accustomed to working with systems integrators and understand the factors that can comprise their efforts.
