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People. Process. Systems.

Ryan Feely
21st August 2020

Why ERP Implementations Fail Image Header

 

When it comes to understanding why ERP implementations fail there are often the same reasons across projects and industries. You will see common problems such as:

 

  1. Poor project management
  2. Rushed implementation
  3. Lack of clear understanding on goals
  4. Missing expertise in the team
  5. Spiralling time and money costs

 

The truth is that many companies are entering new territory when it comes to implementing an ERP system. They have never experienced such a large, complex IT project which makes it difficult for them to see the mistakes they are making.

 

So, what should your company focus on to reduce the chance of failure?

 

Our experience shows that focusing on these 3 key issues goes a long way in helping to create success in a project.

 

1. Planning Before Implementation

If you want to know why ERP implementations fail, then look before the implementation has even started. Before implementation comes selection. And before selection there should be planning.

 

Take the time to define what you are trying to achieve by installing an ERP system and make sure your company has a clear end goal in mind. You need to know what success looks like for your company and what the overall goals are.

 

By mapping out these needs and goals you can start to understand what each department requires from a new ERP system. This can even help you prioritise the must have features over the nice to have ones that may need to be cut later in the project.

 

2. Lacking Expertise

While a lack of expertise may come from not having delivered projects before, we often find that it is the broader industry experience that is missing. As teams are often assembled using internal team members, it means everyone has experience of that company and often not much else. This is a real problem as it doesn’t provide insight into the best habits for success across the industry your company operates in.

 

Consider using outside help where you can ensure a well-rounded experience across projects and companies. This experience ensures knowledge of how other successful companies handle implementations can be moulded to work with your business needs. This will also help provide better insight into the solutions available, cutting down on selection time as vendors who aren’t suitable are not engaged with.

 

3. Controlling Resource Usage

When it comes to controlling resource usage for ERP implementation projects there is often problems. From increasing costs to ever expanding timelines, most projects will run into some form of resource issue.

 

At times this will come from issues that arise during the project. Perhaps a key member is off on holiday so timelines shift. But often what happens is people underestimate the level of commitment needed. Running your business will always come first for team members so factor this in when planning a project delivery. And if you followed our suggestion in point one, then you will have the ability to free up some resources by removing things from your nice to have list. This can be a real project saver when budgets start to run out while ensuring all key features are covered.

 

Conclusion

So there you have some of the key reasons about why ERP implementations fail. Statistics regularly show that over 50% of projects will fail but it doesn’t have to be this way. With some smart planning, a well-rounded team, and tight resource control, you can avoid a failed ERP implementation.

 

If you would like to see what support we can offer to help overcome the challenges of an ERP implementation, then get in touch with the team.

We are here to help.

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