Why ERP Implementations Fail. And No, It’s Not the Software’s Fault.
2017-09-13News Image

by Patricia Bennett, CEO and Founder



It is interesting that a company looking for a new ERP solution for the first time has a list of priorities that may include:


1. Price


2. Software fit to the industry


3. Ease of Use


4. Functionality


5. Compatibility with hardware


6. Support from implementation Partner



Their priorities significantly change once they have their first ERP implementation under their belt. Their number one criteria changes from Price to Support from their Implementation Partner. Experience teaches better than any university can when it comes to implementing a new business system.



Barriers to successful implementations include:



Lack of executive involvement and buy-in - If the executives don’t get involved and make it a company-wide initiative, the end users will not commit to it either. Usually, the person in charge of the project from the company already has a full-time job. If they are not empowered by management to make the ERP implementation their number one priority, the risk of failure increases.



Choosing the wrong internal project manager - If you choose an employee from your company to manage your project, and they don’t have the authority to change internal business processes, or the knowledge to stop unneeded customization requests, the project will falter. The person who leads the initiative should have been part of the selection process, the business analysis, and understand the mission-critical goals of the project.



Resistance to change by end-users - End users know how existing processes work and have a vested interest in getting that replicated in the new system. That can lead to costly and unnecessary modifications. Modern, reputable ERP Software systems are designed to support best practices; modifying the software should have a cost/benefit to the company and not be based on “This is the way I always do it” mentality.



Lack of Communication - Keep end users informed of the new processes that affect them. I had a project manager who would nod her head sympathetically when an end user complained about adding a new process to their workflow. Then she would say, “Yes, and here is why it is worth it to you. You will save days creating end-of-month reports, and they will be more accurate.”



Lack of Training - The difference between a confident end user and one who complains about the new system is training. I heard it described this way. If I asked you to take off your watch and put it on your other wrist, here is what happens. You feel uncomfortable. You can still tell the time, but you have to look for it in a different place to know what time it is. It’s the same with a new ERP system. The more comfortable your users are in finding what they are looking for, the better they will like, and more importantly, adopt the new system.



Lack of implementation budget - The standard ratio of at least 1:1 or 1:2 of software and services costs works for traditional ERP systems. With the advent of Cloud ERP, where the software costs are mitigated by paying a small monthly subscription fee, the ratios are not realistic. It still takes a base amount of hours to implement and tailor your system to work for your company regardless of what you pay for the ERP software. You should budget accordingly for success.



In summary, there are potential pitfalls when implementing a new ERP system. The best news is that many of those risks can be avoided with proper management of the implementation process itself. Choosing the right ERP partner who knows your industry and knows the software is critical to the success of your initiative.



Are you evaluating ERP solutions? What concerns do you have about making the project a success? Please comment below to continue the conversation.







PC Bennett Solutions has the depth and breadth of skills plus the industry and technology experience to be your long term partner. With 100’s of implementations, our track record of successful projects is unmatched in the ERP space. We care about our customers, and because of that we are always honest and set proper expectations.

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