While ERP systems have many benefits, organizations do experience issues with this comprehensive technology. Knowing this, some business leaders may be apprehensive about starting an ERP implementation in their own organization.
Today, we’re sharing some of the most common problems that organizations experience after implementing an ERP system and discussing how you can prevent these issues as you begin ERP selection and implementation.
If you put the right measures in place, you can avoid the most common issues with ERP systems and ensure a successful ERP implementation.
5 Issues With ERP Systems That You Can Avoid
1. Low Benefits Realization
When their ERP system goes live, some companies are surprised to find that it doesn’t deliver all the operational benefits they expected. This is often the result of having a technology-focused mindset.
While your IT team will play an important role throughout the implementation, they shouldn’t lead the project. If they do, it may be difficult to ensure that the system aligns with your business goals.
When you prioritize the business side of the project as much as the technical side, you can select and design a solution that addresses your most pressing business needs.
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2. Unreliable Data
ERP systems rely on business data to operate. When that data is unreliable or inaccurate, it can throw your entire platform off-kilter.
As you migrate information from your legacy systems to the new software, it’s important to thoroughly cleanse it. Otherwise, it could affect the operability and usefulness of your new solution.
While data migration challenges are rampant in ERP projects, you can easily overcome them if you know what to expect. Some of the most common issues include:
- Redundant or inaccurate data
- Outdated data validation rules
- Lack of business resources assigned to the task
- No stakeholder buy-in
- Non-compliance with industry regulations
- Not enough time for validation and testing
Plan to allocate plenty of time to the data testing and migration phase of your ERP implementation. Otherwise, the end product might not deliver the efficiencies you expect.
3. Cost and Timeline Overruns
When ERP projects take too long and cost too much, it’s usually because teams set unrealistic expectations from the start. While it’s tempting to assume that you can be up and running as soon as possible, you’ll realize this isn’t the case when you think about all the different steps and factors involved in an implementation.
We recommend avoiding vendors who promise lightning-quick projects and budgets low enough to raise your eyebrows. In this space, if it sounds too good to be true, it probably is.
Instead of rushing through the effort and automatically choosing the lowest offer, consider the project from all angles and be sure to factor in both expected and unexpected costs.
Also, think hard about any customizations you’re considering. While you might not be able to use most ERP solutions out of the box, extensive customizations can cut into your budget and put your project behind schedule.
4. Low System Usage
You could invest in one of the top ERP systems with all the functionality your business needs, but it could still turn into “shelfware” if your employees aren’t properly using it.
Most of the time, low system adoption is caused by a lack of organizational change management. When employees feel out of the loop about the project, they’re more likely to resist it and spread a feeling of distrust around the office.
By focusing on organizational change management early in the project, you can help your workforce understand and embrace the changes that lie ahead. Be sure to share frequent updates about the new ERP software, and explain all the ways it will make their jobs easier.
5. Functional Gaps
When you invest time, money, and energy into an ERP implementation, you expect it to deliver the functionality you require. That’s why it can be disheartening to find that it doesn’t quite meet those expectations.
This issue usually traces back to a rushed ERP selection process. From pressing ahead without achieving strategic alignment to skipping the requirements gathering stage, there are many shortcuts you could take but aren’t recommended.
When evaluating ERP vendors, remember to dig deeply into all their claims, especially promises around functionality. It’s common for vendors to offer an array of features but fail to mention that they aren’t quite rolled out.
If the statement of work seems too vague or the functionality seems way beyond or below what you need, think twice before signing on the dotted line. You need a system that’s fully functional as soon as it goes live.
ERP Systems Aren’t Inherently Problematic – It All Depends on Your Approach
Like any type of enterprise software, you may encounter issues with ERP systems. However, as long as you follow ERP selection and implementation best practices, you can sidestep these problems.
Our ERP consulting firm can help with every phase of your project, so you can avoid ERP failure. Contact us below for a free consultation.