According to some statistics, only about 40 percent of all ERP implementations are successful. What causes an ERP implementation to fail, and more importantly, how can you ensure your implementation will be among the success stories?
5 Reasons Some ERP Implementations Fail
We once spoke with a company owner who was convinced ERP was not right for his business. During our conversation, we learned the reason he disliked his current ERP system was that it made more work for his team, not less.
The company required significant customization to every order. No order came from the warehouse and shipped directly to the consumer. The very nature of the business () called for significant customization of every order. However, the first effort to at the business resulted in a system that did not achieve the company’s business goals.
With a second, more in-depth approach, the company received the system they needed, and the customer was now convinced of the power of ERP.
There are many reasons why an ERP implementation can fail. The following are five of the most common reasons.
- Failure to match the company’s needs to the right system. This was the case with the sign company. The company gave the first implementation team clear specifications and requirements. However, the first team did not take the time needed to learn the unique nuances of the company’s business and sales cycle. Each company is unique. To ensure the ERP implementation has the best chance of success, it is imperative the consultants take the time to thoroughly understand the products, sales cycles, ordering, and shipping process. Without this, serious missteps can occur, leading to implementation snafus or failures.
- Leadership is not committed to the implementation. Another consideration is the commitment from the leadership team to the project. Leaders must wholeheartedly understand and endorse the ERP solution selected for their company. They must be willing to put the time, money, and resources behind the implementation or the project will ultimately fail.
- No accountability. Accountability holds people responsible for decisions. A lack of accountability behind the ERP implementation means teams engage in too much finger-pointing and not enough problem solving. This bogs down the implementation process and takes the focus off solutions.
- Not having the right people on the team. ERP touches every department and enables everyone in the company to have access to data and information for better decision making. However, some companies decide that because ERP is software, the decision-making and implementation team belongs in the IT department. This leads to IT making decisions, some of which will be helpful but many which may be out of touch with unique department needs. ERP implementation teams must include members from all departments including accounting, finance, marketing, sales, and operations.
- Lack of training. Some companies skimp on training, much to their detriment. This leads to underutilization of the ERP system and complaints that the system lacks features which, in fact, it does have. Take advantage of the training programs offered by the ERP vendor, read the documentation that comes with the system, and ensure employees can access advanced training.
It would be great if we could shift the balance from 60 percent failure and 40 percent success to close to 100 percent successful ERP implementation. Make sure your company is among the success stories by taking the proper steps for a great ERP implementation experience.
By – Acumatica Gold Certified Partner
