It’s easy to give up hope when an ERP implementation goes over budget, exceeds its timeline, or suffers from low user adoption, but remember that it’s never too late (or too soon) to start over. Declaring ERP failure may seem over-dramatic but the sooner you recognize the reality of unmet expectations, the sooner your organization can recover.
Most of the issues that cause ERP failure are not related to software functionality but instead are related to inadequate organizational change management and business process reengineering. If a significant portion of your organization’s ERP budget is not dedicated to these two success factors, your organization will not achieve the benefits it expects from its ERP system and it’s probably not premature to call the project an ERP failure.
Recognizing the signs of failure early in implementation prepares your organization for project recovery. Once your organization determines that its ERP implementation is headed in the wrong direction, the project team can begin to develop a project recovery roadmap that defines the short-term and long-term changes that need to be made in order to improve business processes, increase system usage and maximize benefits realization.
Following are five steps organizations should take to redefine their implementation strategy and recover from an ERP failure:
- Evaluate each functional area and department within your organization and work with stakeholders to determine some key performance measures. Then determine how ERP software can be used to achieve these key performance measures.
- Reevaluate your implementation plan and, if necessary, redefine expectations, milestones and resource requirements based on the scope of activities you anticipate.
- Include organizational change management in your project budget and scope of work. Your organizational change management plan should focus on training, communication and increasing executive and end-user buy-in.
- Reposition the project as a process improvement project rather than an IT initiative.
- Talk to end-users and project team members about how the project has been impacting them and their work lives. Ask for their true opinions about what can and should be done to improve results.
In the aftermath of an ERP failure, your project team may be unmotivated and unenthusiastic about moving forward. But don’t let the term, “ERP failure” cause your team anxiety. Instead, begin project recovery right away. It’s never too soon to start over.
Learn more by downloading our 2013 ERP Report: Organizational Change and Business Process Management, and by listening to our podcast, ERP Failure and Recovery.