Are you planning an enterprise resource planning (ERP) implementation? If so, you naturally want the project to be a successful one. It requires significant time, money, and resources, so the ROI needs to be solid.
There are many factors that go into successful ERP implementations, from choosing the right vendor to investing in change management and post-go-live support. However, if you really want to know how to do things right, it often helps to start with what not to do.
Today, we’re sharing six of the most important ERP implementation lessons learned through our years of analyzing high-profile ERP failures. Read on to discover how even the best-laid plans go awry, and how to avoid the same problems in your own project.
6 ERP Implementation Lessons Learned
1. Align Expectations Early
Before you implement an ERP system, make sure everyone in your organization is aligned on at least two key points:
1. What your business requirements include
2. How the ERP system will meet those requirements
When failures occur, it’s often because teams don’t see eye-to-eye on these critical initiatives.
First, take the time to define your business requirements. Together with your project team, discuss where you currently are and where you want to be in the immediate future and the long term.
As you map out all your business processes, you’ll uncover functionality and skills gaps that are keeping you from reaching your full potential. Restructure these processes according to how they should look to achieve your business goals.
Then, share your ERP requirements with vendors. Our Top 10 ERP Systems Report gives a good overview of vendors and a baseline as you begin meeting with vendors and comparing all your options.
If your key stakeholders and department leaders can’t come to an agreement at this juncture, it may be time to perform an organizational readiness assessment to determine if now is truly the time to move forward with such a major endeavor.
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. Ensure Executive Involvement (Not Just Buy-In)
For your ERP implementation to be successful, it isn’t enough to simply secure executive buy-in. You need their support and their enthusiasm before you can move forward.
In other words, you need their visible and vocal support for the project. Your C-suite can and should help you champion the effort from the very beginning. If they’re actively in favor of it, you’re less likely to experience resistance and concern from other employees.
Not only does this help with organizational change management (OCM), but it also helps decision-making go more smoothly. The executives should help you make decisions when it comes to aligning the new system with your project goals, as well as your business processes. This way, you’re less likely to invest in an ERP system that doesn’t meet needs and expectations. When you involve your leadership from the start, you know exactly which goals to prioritize, and where your focus should be.
3. Regularly Manage Risks
When it comes to risks, many businesses prefer to ignore the potential issues that could arise during their projects. Maybe if you don’t acknowledge them, they won’t come to fruition.
The reality is that every type of digital transformation includes a degree of liability. This occurs any time you have a major investment on the line.
If you identify and anticipate those risks before they occur, you can often reduce their impact. In some cases, you can avoid them altogether.
This is why regular risk planning and risk management sessions are key during your ERP implementation. If you notice any risks that arise between sessions, have plans in place to follow up on them accordingly.
4. Choose Your Systems Integrator Carefully
There are several ERP implementation partners that can help lead your project to success. Two of the most important include:
• An ERP consulting company
• A systems integrator
The right systems integrator will be on hand to provide expert support at each stage of your project. Interview several and make sure they’re the right fit for your business before moving forward.
Ask about their approach and how their timeline works. Do they prioritize quick implementation? If so, make sure they also offer plenty of support along the way. While time might be of the essence, you don’t want to cut corners or leave your employees in the dark.
Find an integrator that will act as a true partner in this project and will prioritize support at every step.
5. Control the Project Scope
Too often, we see ERP projects that start out lean and eventually become overblown in terms of both budget and schedule. Most of the time, you can avoid this issue by selecting an ERP vendor that sets realistic expectations from the start.
However, it’s equally important to control the scope of your project once it gets going. Put processes in place that dictate how you’ll control and manage change requests, as well as expensive customizations.
When projects go untracked and unchecked, it can heap time and money onto the effort. If you don’t have the right preventative measures in place, this can be enough to result in ERP failure.
6. Invest in Change Management
We touched on the importance of OCM when discussing executive involvement. However, it deserves its own section because this is an issue we see more than any other.
When a company focuses so much on the technical side of a project that it loses sight of the human side, serious problems can occur.
From the beginning, prioritize your people. Understand that your employees might be hesitant to embrace the new ERP system and all the new processes and workflows it will bring. Communicate updates clearly, answer questions honestly, and keep them involved as the implementation moves forward.
Don’t Follow in Their Footsteps
Keep these ERP implementation lessons learned in mind as you take the first steps forward in your implementation. Don’t fall into the same traps that have gotten the best of so many well-meaning companies before you.
Need more help as you get started? Our ERP implementation consultants can guide you through every step of your project, from vendor selection to post-live support. Contact us below to learn more.