Spend time and take advice preparing for the challenges of your ERP implementation – or pay the price of failure.
Successfully rolling-out a purpose-designed ERP system in any company or organisation will:
- Boost productivity.
- Increase efficiency.
- Dovetail the front-line sales team very effectively to the production departments.
- Even make the finance director laugh out loud with pleasure.
Well, OK, maybe not the last bit, but everything else is true – IF you face and successfully overcome the main five ERP implementation challenges…
So what are they?
1. Don’t rush. Allow sufficient time to research, plan and make the right decisions.
Even the big guys can get it wrong. Seriously wrong…
In 2012 the United States Air Force abandoned its slick new combat support system, after racking up $ 1 billion (£600 million) in costs during the previous seven years.
Nike once blew $ 400 million (£240 million) trying to upgrade its supply chain and its ERP systems at the same time, then lost $ 100 million (£60 million) in sales and saw a massive 20% wiped off its share price.
The mantra for ERP, as with so much else, has to be: ‘Act in haste or repent in leisure.’
2. Choose the right vendor
If you choose a supplier without the correct skillset or sufficient experience of working in your sector, then ERP implementation will be a corporate nightmare.
However, if management teams carefully identify their company’s requirements, then research their potential development partners for an ideal match, ERP implementation can be a sweet dream.
3. Communication is key
The core issue which turns many ERP implementation projects into expensive fiascos is communication, or rather the lack of it.
Explain to everyone who will be impacted by the implementation why it is happening, the benefits and any changes to the way they work.
If you don’t…
“As a leader of the change that accompanies the new ERP implementation, you have to work very hard to mitigate the inclination to move directly from the “Comfort Zone” to the “Panic Zone” that comes from the reality of the going live with the new ERP system. The “Panic Zone” is a place where disbelief lives and fears stop all action. It’s the place where discontent thrives and, if left unchecked, where ERP projects go to die.”
4. Test with ‘real’ users under ‘real’ conditions
Don’t believe anyone who tells you that it is enough to load-test your new ERP system via an external technician carrying out simulated tasks.
Always test with ‘real’ users and carry out a mock ‘go-live’ rehearsal. Practise under the same conditions which will occur when the real ‘go-live’ event is held, not on a holiday weekend when most staff are on the beach.
5. Money paid on expertise is money well spent.
Don’t try to save money on the implementation by not employing your vendor’s project manager and using the in-house technical team instead. This will end only one way…
“A consultant PM’s focus is on upgrades so they know the pitfalls. Navigating these pitfalls ahead of time will make the difference between an on-time/on-budget system and a perpetual money pit.”
Remember to face these challenges for smooth, effective ERP implementation:
Allow sufficient time for research and planning. Make sure you choose the right partner for your business. Communicate, communicate, communicate… Test under real conditions or fail under real conditions. Don’t skimp on the expertise that can bring you success.
Not convinced why you need ERP software? Read the ‘Business owner’s guide: 6 selfish reasons for wanting ERP’.
This post first appeared on the Sanderson blog.
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