Implementing an enterprise resource planning (ERP) system doesn’t stop at purchasing one. While it’s good to be excited about rolling it out to your employees, it’s a big project that requires careful planning and preparation. No matter what little modifications you include in the implementation, the odds are still stacked against you, if you recklessly enter the project.
Avoid the following pitfalls in ERP implementation:
1. Incompatible Technology
Most ERP implementations fail due to the reluctance of companies to let go of old work processes that are not compatible with current technology. The false assumption that all ERP software is a good fit for the organization practically drives the sentiment. But, as with all business applications, there are best practices to follow for a successful deployment.
Mitigation: The success of most IT modernization projects lies in setting realistic, detailed, and specific goals. Define what processes you want to include in your system, what problems will it solve and what financial benefits will the organization and its stakeholders get from the project. Keep in mind that ERP implementations are always risky, so having a clear direction is the key to success.
2. Weak API Integration
Developers design ERP software to centralize, integrate, and process information and systems involved in the business to facilitate a streamlined exchange and workflow. Companies need to carefully implement Integration of additional data. All these require a robust application programming interface (API) that would dictate how different business components would interact. Failure to do so will most likely cause the implementation to fail.
In some cases, restricted information sharing or “information silos,” where separate applications are used for different business process, may also lead to failed projects.
Mitigation: Most implementations are bound to fail at the onset. But there’s no reason to stop at the first failed attempt. When it comes to modernizing and automating business processes to the greatest extent, your business need to make sweeping changes at the back-end via APIs.
SAP vs. Oracle Case Study
SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.
Customizing an ERP software is a make or break situation. It adds risk, time, and cost to the project, not to mention the technical challenges that may arise and derail the initial timeframe of the project. In fact, even organizations with unlimited resources and a strong IT department find this task extremely difficult, in that they decide not to make any customizations at all.
Mitigation: In cases where some degree of customization is really necessary, see to it that you have the resources and tools to commit to and tightly manage even the smallest customizations. Start out small with implementation and customize gradually when the dust has settled, and the system has been rigorously tested and used for the recommended period.
4. Inadequate End User Training
The prime reason companies invest in ERP systems is to have a centralized space to manage its core business processes, including product and production planning, marketing and sales, inventory management, retail, shipping, payment, finance, and down to human resources and even accounting. But more than being a tool, it should make the lives of its end users easier and their work more efficient.
Mitigation: Training those involved on your ERP project, both internal and external, is a great step. Working closely with a reputable independent ERP consultancy firm, such as Panorama Consulting Solutions, will also help guide the team in the right direction and provide a wealth of resources to facilitate a successful implementation. Provide sufficient training to its end users, as well, before the rollout.
Planning ahead prevents the enormously difficult and costly task of recovering from a failed program. No matter the scope of the project, implement it in phases and at a pace that management, ERP teams, and end users can handle and tightly manage.