Despite the wealth of knowledge available on ERP system implementation, approximately 50 percent of ERP implementations fail on the first try, while 30 percent take longer than originally estimated. Top project issues include scope creep, unanticipated costs, poor quality, and discontented users.
ERP implementation success hinges on four major factors: scheduling, budget, quality and user adoption. While proper time and budget allocation are obvious aspects of ERP implementation, solution quality and user adoption can make or break implementation success and often get less attention.
Here are four of the biggest factors in an ERP implementation that lead to success.
1 - Implementation Planning is a Process, Not an Event
Many businesses approach ERP implementation with an insufficient understanding of just how complex the process will be. Instead of engaging key stakeholders and team members to gain critical operation information used for planning and setup, they regard the update as being a turnkey IT affair: consult IT, buy the system, make the changes and magic is supposed to happen.
For successful implementation and deployment, organizations must perform a self-evaluation which includes basic company and operational details. While IT can give you a breakdown of the current software situation from a technical perspective, its your on-the-ground workforce who will often best help rationalize existing system successes and risks with what is needed in a new system.
This will take time, of course, but don’t shortchange the process.
An ERP solution touches every aspect of your business, so don’t underestimate this important first step. You can download our vendor-neutral ERP Evaluation Guide to help you understand what questions you need to ask about your business before implementing ERP.
If you’re not willing to spend the time and resources now to make a thorough assessment, you’ll almost certainly pay a higher cost later.
2 - Costs Don’t End with Software Purchase
In addition to expecting speedy implementation, business leaders often underestimate implementation expenses. They fail to consider maintenance costs or the level of talent required to successfully launch the project. In attempting to accomplish more with a limited budget, the result is typically failure.
During the self-evaluation stage, make time to properly budget based on what ERP actually costs end-to-end. Consider what licensing you’ll need. Take into account project management, software installation, software configuration, data conversion, testing, customization, and training costs. Especially training costs, which often get shortchanged in planning.
As you get deeper into the implementation process, don’t be afraid to communicate regularly and often about additional costs, too. When it comes to ERP implementation, those additional costs are going to happen, so better to signal the need and allocate appropriate resources.
Be sure to consistently document and check your overall project scope, too. In this way, you can get the jump on budget changes ahead of time, clearly articulate the reasons for those changes, and determine how to keep your project on track to achieve all promised enhancements.
3 - Features Over Functionality Can Make for Project Disaster
While business enhancement is what ERP implementation is all about, don’t fall prey to believing fancy features will automatically cure your ailing processes.
Organizations often tend to select ERP with the longest feature matrix. This is a mistake, however. Those tempting add-on and customizations can often lead projects astray without delivering essential functionality.
The first priority of solution selection is addressing the organization’s needs and requirements. Businesses should consider the solution’s track record and customer support offerings as well as its flexibility and integration ability, too.
It is easy to get lulled in by a long list of features, but focus instead on what your planning actually requires from a new system. Features your business doesn’t need is actually a trap.
4 - A New System Won’t Work Unless Employees Use It
Customer support is particularly necessary in helping your team fully embrace and adopt the new ERP system once it is in place. But you need to prime your employees for the changes coming long before those changes arrive.
The self-evaluation phase is a great place to build team buy-in. Your team member contributions to ERP implementation help to precipitate ownership and excitement over the changes to come. That excitement heightens particularly when employees understand how the changes can make their jobs easier while gaining improved results. And those changes sound even sweeter when there are perks and advancement tied to system adoption as well.
The point is not to let employee resistance to change derail your ERP rollout. If you overlook the value of a change management plan to optimize user adoption, you’re setting yourself up for a hard ERP implementation experience.
Making the decision to upgrade or adopt an ERP solution is a positive step in optimizing and positioning your organization for positive growth. But it's no easy feat. Don’t discount the complexity of undertaking such a project, and don’t sabotage your success by ignoring the four most important aspects of ERP implementation.
If you’re willing to properly investigate the time, cost, quality and adoption strategy necessary to implement a new ERP solution, then you’re on the right track for ERP project success.