Don’t believe all of the hype. Mismanaged expectations and misinformation shared during sales cycles for ERP systems are major reasons why so many implementations fail.
Unfortunately, buyers of new ERP systems often rely on faulty information when making their purchasing decisions. These multi-million dollar investments can be risky at best when flawed assumptions underlie those decisions.
The good news? Educated buyers that go into their ERP implementations with their eyes wide open are much more likely to succeed than those that don’t. Being an educated buyer means being able to delineate between fact and fiction surrounding ERP systems.
Here are 5 common – yet inaccurate – myths that you should be aware of before investing too much in your new ERP initiative:
ERP implementations can be quick and inexpensive. ERP vendors and their sales reps love to sell the concept of quick and easy implementations. We’re all looking for that silver bullet or “easy button” that we can use to make our implementations easy, but these myths don’t exist – at least not yet. Be leery of terms like “implementation accelerators,” “out of the box functionality,” and “pre-configured solutions.” Things like these may have slight benefits, but they are typically not material enough to make a significant difference. The business transformation portion of your implementation will always be the most difficult aspect of your project, and no implementation tool can automate those activities.
No one is implementing on-premise ERP systems anymore. Industry analysts – many of whom are paid by upstart cloud and SaaS ERP vendors – have been calling for the demise of the on-premise model for several years now. According to both our experience and research outlined in our 2015 ERP Report, while SaaS solutions are gaining traction, a majority of new ERP implementations still leverage the on-premise model. This could change as CIOs and other executives become more educated and comfortable with the perceived risks of the cloud, but for now, plenty of organizations are still more comfortable with owning and managing their ERP systems within their four walls.
Your ERP system will drive your business process improvements. Too many organizations fall prey to the tendency to want to believe that their new ERP system will tell them how to reengineer and define their new business processes. Today’s ERP systems are far too sophisticated, robust and flexible to define your business processes for you. No matter what, workflows still need to be defined and software needs to be configured, so it is important to remember that new ERP software is no surrogate for engaging in critical business process management activities as part of your implementation. Here again, resist the temptation to believe that industry pre-configurations and out-of-the-box functionality will define your processes, because they won’t.
Organizational change management isn’t always necessary. Too often, we hear comments like “we’re not that complicated” or “our employees are excited for the change” as justifications for why organizational change management isn’t important to certain implementations. However, I have yet to see an implementation succeed without it. In fact, in each and every one of our ERP expert witness and project recovery engagements, organizational change management was a key contributor to the failure. It may be tempting to think that everyone is on board with the new initiative – and they very well may be, on the surface – but each and every organization needs organizational change management to make their ERP initiatives successful. And organizational change entails much more than end-user training. Learn more about what an effective organizational change management program looks like.
We can implement without any customization. Most executives are afraid to even think about customization, and rightfully so. However, our 2015 ERP Report shows that 91% of organizations end up doing some sort of customization during implementation. Of the 9% that manage to implement vanilla, out-of-the-box functionality, most are small upstart organizations without much complexity or sophisticated business processes. So unless you are a very small organization with very little complexity, chances are pretty high that you will need to customize your ERP system to meet your business needs and competitive differentiators.
There are plenty of things you’ll need to know before embarking on your ERP implementation, but these five myths are the most likely to derail your efforts. Sort through the fiction and stick to the facts to make sure your project is a success.
Learn more by downloading our 2015 ERP Report.