Reasons for Failures in ERP and How to Mitigate them
What are the challenges that you have faced while implementing an ERP. When can an ERP implementation fails & what steps that needs to be taken to mitigate this
The following writeup is a combination of our learnings over last 29 years. Learned from our experiences.
Demand of Too much customisation
Each result of each ERP might be similar
Need is also similar
But, yet, Each software is built on different logic to achieve the similar result
The problem erupts when
Users do not want to see the new method, and want to dictate the ERP team on everything
They want ditto screens, ditto reports, ditto logics as the old software
Even if the results are ok, they want want the results, in a new way, they want to see the old screens, old methods only
Proper change management
Managing the users, showing them the benefit
And assuring them that they are safe. And you will yourself see the new ERP system.
Of course, we will help do proper testing and simulation, and dry runs of the system multiple times before going live
Linking with other Softwares
Each Software is excellent individually
But when you want one ERP to take unlimited data from the other software and give same results, it creates problems
The 2nd software vendor may or maynot cooperate
The 2nd software may or maynot have all the information
Sometimes this becomes a bottleneck and a time waster
Linking with Weighing machines = ok
Linking with Printing machines using standard SCADA = ok
Linking with Biometric machines for various things = ok
But assuming , 100% linking with all other softwares becomes a big effort. Sometimes very happy, sometimes not.
Shareholders / MNC Auditors pressure
Sometimes even if our software was largely good, we faced problems of the very large Auditors or very large investors demanding change in the ERP
So, if you want only a “best-selling” BRAND of ERP, irrespective of results, then it becomes a different situation.
Lack of top management commitment .
If top management shows little interest then everyone will see it and adopt the same attitude…
Normal Solution : get out there, walk around halls, attend requirements meetings and show that you care.
Best solution in words of Mr Sangeet Gupta, our co founder : start seeing the reports yourself, from first month itself. Enjoy every report, even if it is not perfect, start using the data, and tell everybody that old ERP reports and excel reports are not welcome anymore.
Unrealistic expectations .
Setting unrealistic ‘go live’ dates, unrealistic estimated project costs, or not anticipating the burnout factor on the core team doing the implementation and their current job, is a great way to lose your best managers and sink your project.
Solution : Be realistic. Rome was not built in a day. Go step by step, the ERP team is your friend. Partner with them
Where required, put full force and expedite
And where recommended, go slow, give breathing time
Understand the concept of predecessor/successor activities & dependencies
Poor ERP package selection –
Take a “General Package” and expect it to be customised with 10000 customisations… this does not work
Takes more time, more cost, more patience, and sometimes sad news
Solution : Take an ERP software which works in similar industry. Select a ERP team that has worked in similar environments
Inadequate project resources ( People ) –
You must have your best players working on the ERP project. And you must also backfill their current jobs depending upon how much they are involved in the project. Many derailments, delays, tensions, postponing, and resignations have been tendered due to unrealistic expectations that a core team player will also continue to do their regular job.
There is Quite a bit of Truth in this problem
And solution is intertwined in the para above.
so, Allow them to succeed. Allow them to hire some additional resources, for the ERP changeover period
Resistance to change and a lack of employee ‘buy-in’
People love change, as long as it doesn’t affect them!
If you don’t communicate why there is a need for a new system and how it won’t be eliminating most people’s jobs (in fact, workers may be retrained and redeployed in positions with more responsibility), then employees may not fully adopt the new system.
I am sure you will manage this properly
Don’t make the people “fear” the new ERP.
Don’t make them afraid, that now the management will “know” everything
Poor project planning –
Good project management is essential for good implementation.
Just like setting up a New Factory in a New Country, you have to handle a hundred things, and yet deliver the results in time
It needs proper coordination , and proper management
Inadequate training and education –
Assuming that people will train themselves = It does not happen
Assuming that even after training they will start using = again inadequate
You need to monitor and start using system yourself. If this is done, others will follow suit on this journey successfully,