The failure of an ERP implementation can have a huge impact on a company’s ability to continue operating. Whether that is from costs spiralling so badly that money runs out or such disruption during the switch that productivity drops to levels that no longer meet demand, an ERP implementation failure is bad news.
Many ERP implementation failures come down to the same few root causes that exist across companies around the world. A lack of implementation skillsets, no clarity on roles, lack of resources, and over-reliance on vendor input has seen many companies facing an ERP implementation failure.
If you want the best chance of success for your ERP implementation, then it is vital you consider the issues we discuss below and have a plan to address them.
Lack of Implementation Skillsets
An ERP implementation happens so infrequently at a company that people working there will often lack the experience and skillset required. Even those team members who have been through a few changes will not likely have up to date knowledge due to the rate of technology change in the ERP market.
That is why it is often valuable to work with an ERP consultancy who can help to fill any skill gaps that exist within your teams as well as keep the project moving at pace.
No Clarity on Roles
To avoid ERP implementation failure, internal teams need to know their role in ensuring success. This means owning the area they are responsible for with clear leaders in place who make any final decisions. Too often we see projects hit problems and no one is there to take responsibility, often believing someone else should have been watching.
Avoid this problem by assigning clear roles, responsibilities, and channels of communication for any issues that arise.
Lack of Adequate Resources
Companies often fail to realise the resources required to make an ERP implementation a success. The time commitment needed from team members can make it difficult to juggle with their day job which leads to oversights and mistakes. Not allocating the right level of resources will make employees stressed, reduce the chance of a successful implementation, and lead to timeline delays.
Ensure you carefully consider how long a project will last and free up the resources needed in each department so they can focus on avoiding an ERP implementation failure.
Over-reliance on Vendor Input
Vendors will often provide a team of consultants for an ERP implementation who know the product like the back of their hand. This knowledge can result in internal teams coming to rely on them for support 24/7 which uses up the time that is often baked into contracts. There is also often a misunderstanding of where the vendor will and will not help and this scope can leave businesses facing a skill gap they need to quickly fill.
Make sure you take the time to understand what a vendor will cover and refer back to the previous point on the need for clearly defined roles within a project.
Other Potential Causes
While we have covered the main ways that an ERP implementation can result in failure, there are a few less common but still frequent issues.
First, adding in customisation to an ERP system can cause headaches for the implementation teams. The more advanced the customisation the more time and costs you need to consider to ensure they are done properly. If you do decide to go down the customisation route, be sure it is for a worthwhile value-add and that the feature does not already exist within your ERP.
Second, if the testing of the new system is insufficient you can expect to run into problems later. It is vital to test the system with a variety of data and use-cases to ensure everything is working as expected. Bring any errors and issues to the vendor while they are still working on the project to avoid added costs later on.
The final cause of ERP implementation failure is poorly defined objectives for the project. This will have an impact across the entire project but will really come to light after the implementation when it feels like nothing has changed. Teams will use work arounds and avoid the system where possible due to poor objectives that have failed to address what was really needed for a new system.
There is no escaping the fact that an ERP implementation is a difficult task that requires a great deal of financial and time commitment. Make sure you get the ROI you deserve by considering the points we covered in this article and prepare a robust plan for the best chance of success.
Make sure your ERP implementation does not end in failure by working with the experts. Contact us today to see how we have helped companies across Europe to successfully deliver their ERP project.