ERP selection failure is one of the many ways that an entire ERP project can go wrong. An ERP selection failure happens any time a company chooses to go with a system that is not right for their business. This can be a surprisingly common occurrence due to many ERP systems offering a broadly similar feature set. But once the system is in place it becomes clear it is not fit for purpose and work arounds start to appear.
The root causes of ERP selection failure can be broken down into three main areas:
- Poor Requirement Gathering
- Rushed Selection Process
- Lack of Experience
In this article we will be looking at all three areas in depth to see what causes these issues and how they can be fixed or avoided.
1. Poor Requirement Gathering
We talk about this area a lot but that is just because of how important it is! The value of ERP requirements gathering is well known and when it is done poorly it can lead to ERP selection failure.
Proper requirements gathering is important for knowing what features you absolutely need to have in the solution you select. These will be vital for your business to run efficiently and are separate from features that would be nice to have. Doing this keeps what you need clear and concise and allows you to test vendors on how their system handles your specific business needs.
To get more detail, you can read our article on how to gather requirements for a new ERP system.
2. Rushed Selection Process
A rushed selection processes can be a real downfall in any ERP project. This happens most often when there is an urgency within a project, such as the current system becoming end of life or when budgets are tight. This can lead to only well-known systems being considered when there are often smaller, more specialised ERP options that are real competitors.
To avoid rushing the selection process it is important to budget some extra time here. This allows teams the chance to explore other options in the marketplace and see more vendor demos. It is very easy to select one of the big systems believing it can do everything you need and end up disappointed. Spend the time to consider a broader range of what the market has to offer, and you will set yourself up for success.
3. Lack of Experience
ERP selection failure due to a lack of experience within teams is a very common issue. Sometimes this lack of experience comes from not having been part of an ERP project before but often it is a lack of experience in a broad industry sense. Many team members will not have experienced a variety of systems at different companies which means their view of options is narrow.
Working with an independent ERP consultancy can alleviate this as they have experience from delivering hundreds of projects. They come armed with knowledge about what systems exist and what best practices are for your industry. This can give a real jumpstart to the selection process by narrowing potential options down quicker and challenging vendors during their sales pitch.
Conclusion on the Root Causes of ERP Selection Failure
There are a lot of ways an ERP selection can end in failure, but they often stem from the three areas we covered in this article. The real problem does not appear until after the system is implemented and in use as teams start to rely on work arounds to do their job. This leads to lost productivity, lower system ROI, and using less reliable ways of working, such as spreadsheets.
If you would like help with selecting a new ERP system at your company, then get in touch with us to discuss your needs.