International ERP implementations are challenging – implementing ERP software in Japan is a different world than implementing in France.
There are the obstacles that automatically come to mind, including time zones, language, and reporting structure, but there are a number of risk factors you might not expect.
Let’s talk about the most common international ERP implementation mistakes and why they happen.
Why These Projects are Challenging
Potential obstacles are easy to overlook if your executive management team isn’t collaborating with the IT team or the internal implementation team. Due to their limited knowledge of the business processes and cultures of their colleagues around the world, executives might leave key scoping items out of the initial project parameters.
Following are some implementation mistakes your team might make if your organization doesn’t account for the complexity of international implementations.
6 International ERP Implementation Mistakes
1. Not Ensuring Alignment
Most often, an organization is aligned at a senior management level because executives’ daily activities incorporate strategizing with their colleagues around the world. They know the best way to communicate, and they understand cultural differences.
However, the next level in the organization often does not have that insight and relationship with their peers globally.
Organizations must take time to understand requirements at worldwide functional levels prior to the project kick-off. Site visits are preferred.
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. Master Data
Master data can be all over the map in global organizations with layers of different ERP systems. Before considering standardization of data, organizations should understand executive reporting requirements.
For example, the grouping of products, grouping of customers, and chart of accounts, can be a headache during an ERP implementation if they are not planned for and addressed early in the project.
3. Global Design
One of the key building blocks of an ERP implementation, especially with the complexity of international organizations, is global design. It should be robust or it will present issues throughout the project. Organizations should spend extra time during this phase, if needed, as it will save time and money in the long run.
4. Global Implementation Partners
Implementation partners will talk about worldwide resources, but as with any service, you need to understand the resources you are obtaining.
Ensure that these resources have global experience, especially in key markets that drive your organization’s growth. Take the time to interview all vendors and have them onsite prior to choosing an implementation partner.
As with any implementation, cultural fit of the vendor is essential for success.
5. Implementation Phases
Implementation phases are unique for each organization. Many organizations view phases as a math equation without considering the burn-out, learning curves, turnover, and required downtime associated with international travel.
Organizations often move from Site 1 implementation to Site 2 implementation without ensuring stabilization and providing downtime for the project team before the team moves to the next implementation site.
6. Data Privacy and Security
Data privacy and security are essential considerations for any organization, especially an international one. ERP systems store a vast amount of sensitive data, and a data breach could have serious consequences for an organization, including financial losses, damage to its reputation, and legal liability.
Our electronic software security breaches expert witnesses have seen a number of ERP failures involving security breaches. Our consultants have worked on these cases with our technology experts, so they bring a unique perspective to ERP security.
Avoid These International ERP Implementation Mistakes
You can avoid these mistakes if you take the time to align your teams and ensure correct global design. Most importantly, you should make project phases realistic.