An ERP implementation can unlock hidden value within your organization. With the right solution, you can boost operational efficiency, increase data visibility, and improve the customer experience.

However, it’s important to approach this major transformation with care because many ERP implementation challenges await.

When you know what to expect, you can plan to follow proven best practices during every phase of your implementation. Today, we’re sharing a few of the most common challenges of ERP implementation and the best practices you can use to overcome them.

Top 5 ERP Implementation Challenges

1. Navigating the Project Planning Stage

As soon as your project gets the green light from upper management, your first thought might be to jump directly into software selection. You’ll plan as you go, right?

Not quite. Too often, companies fail to devote adequate time to project planning, and they pay for it dearly down the road. 

Without a detailed plan in place, you may experience what is known as “scope creep.” This can occur if you add more and more processes and functionality to your project scope, without ensuring adequate budget, time, and resources to support the additional work.

In addition to developing a project plan and assembling a qualified ERP project team, another key activity during the project planning stage is business process management. This is about looking at your current workflows and identifying pain points and process improvements. Then, you can build a list of business requirements that will guide you in selecting the right ERP solution.

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. Selecting the Right Technology

With the right foundation in place, you can begin your search for the best ERP system for your company.

You’ll soon discover that there are hundreds of different platforms and just as many configuration options, at which point you might be tempted to throw up your hands.

Many organizations simply select the solution with the most bells and whistles, even if it includes features they don’t need. Be wary of selecting a solution simply based on a slick vendor presentation or because you know a peer company purchased a similar platform. Instead, think about which tools and functions your team will actually use to avoid this common ERP implementation challenge.

This goes back to the project planning we discussed earlier. When you know your business requirements, you can select a solution based on this information rather than outside influence.

3. Prioritizing Data Management

ERP software consolidates and centralizes all your business data into one location. While this means that users can access data anytime, anywhere, this visibility is useless if the data isn’t reliable.

Data quality is critical during an ERP implementation. However, before you can remove duplicates and fix errors, you need to first find your data sources. Addressing this challenge of ERP implementation is easier said than done, as data is usually spread across disparate systems – from your company intranet to a paper-based filing system. 

This is why it’s important to allocate plenty of time to the data migration phase. This phase is focused on ensuring that only clean, useful, and accurate data goes into the new system.

4. Ensuring System Usage Among End-Users

While technical ERP implementation challenges can occur in an ERP project, most issues are people-related. Specifically, you may encounter some difficulty in convincing your workforce that this is a beneficial change. 

As you overhaul current practices to make room for new ones, you’re asking employees to shift their mindsets. This can be a jarring proposition to some, and you will definitely encounter pushback. 

Developing an organizational change management plan before a software implementation can help you strategically communicate, minimize change resistance, and equip employees with the necessary skills and knowledge.

By focusing on the people-side of the change, you can avoid costly downtime and maximize the return on your software investment. 

5. Optimizing Project Management

From the initial discovery phase to ongoing post-launch updates, an ERP project includes many stages that bring their own set of ERP implementation challenges. At each one, you’ll need a competent project management team at the helm.

The right project manager can keep everyone on task, on time, and on budget. They can also make sure that all stakeholders are actively participating in project design and development activities. 

This type of oversight requires both people skills and project skills. A project manager should be able to communicate easily, listen well, and make informed decisions that keep your company’s mission top of mind. 

Lay a Strong Foundation

An ERP project has many moving parts. It can be difficult to anticipate everything that might go wrong, so it helps to lay a strong foundation before ERP selection by focusing on project planning.

When you know the common ERP implementation challenges to expect, you can plan to give these aspects plenty of focus. 

Our ERP consulting company can help you develop a project plan that prevents ERP failure. Contact us below for a free consultation.

About the author

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As Director of Panorama’s Expert Witness Practice, Bill oversees all expert witness engagements. In addition, he concurrently provides oversight on a number of ERP selection and implementation projects for manufacturing, distribution, healthcare, and public sector clients.

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