Growing mid-market consumer brands need a modern, flexible backend infrastructure that can handle the relentless technological and market changes that businesses face today. If operational agility was a virtue 10 years ago, it now is table stakes.

Cloud ERP is the way that consumer brands gain this operational agility. Unlike on-premise ERP, a cloud ERP implementation addresses the dynamics of operations today while laying the foundation for quick, efficient adaptation later as conditions change. Cloud ERP is a future-proof solution because it can grow and evolve with the business, enabling new business models and reconfiguring operational processes and capabilities without having to put in a new system later.

The good news is that cloud ERP implementation is faster and less costly than your organization’s previous infrastructure upgrade. But like all business modernization projects, it is not without its gotchas.

The Top 8 Cloud ERP Implementation Challenges

Even cloud ERP implementation can get mired in project delays and cost overruns. But your business can avoid those gotchas with a little planning.

With that in mind, here are eight of the most common cloud ERP implementation challenges that mid-market consumer brands face, and how to avoid them!

1. Business Disruption During Rollout

Moving to an entirely new system of record impacts every part of your business, which can cause operational disruption if not handled correctly.

The way to avoid business disruption during cloud ERP implementation is by taking a phased rollout approach. Instead of migrating all departments and systems at once, start by moving a single department or functional area to the new system. Then repeat this process until each part of the business is using the new cloud ERP. This way the project doesn’t choke your business, and more thorough testing can take place during each step.

2. Unexpected Resource Constraints

A cloud ERP implementation project can get slowed down when your business doesn’t allocate enough resources to the project. Attention is split, momentum is lost, details are forgotten, and costs rise.

You can avoid resource constraints by mapping out the entire implementation process and appropriately allocating the man-hours and other internal resources needed before venturing into the actual implementation. It is also important that you build a cross-functional project team for overseeing the project, and assign a percentage of employee time to making the project a success. You also will want to have the project led by a senior executive who can help clear the way and keep rollout on track from an organizational perspective.

3. Project Creep

Cloud ERP is flexible and can give consumer products businesses an almost infinite range of new capabilities. But each new capability adds project time, so there is the danger of the project ballooning beyond its original scope.

The way to avoid this cloud ERP implementation challenge is through strong planning that includes scope lock-in before implementation. Make a wishlist for future additions to your ERP as new capabilities are discovered or requested, but resist the temptation to add “just one more thing” during rollout. There will be time for those additions later after go-live.

4. Bespoke Process Delays

Your consumer products business runs on a host of legacy processes. Some are industry standard ways of doing business, but many are bespoke workflows and processes that have evolved internally over time. The problem is that making your new ERP system fit your existing bespoke processes lengthens cloud ERP implementation time and limits the scope for process improvement. Your implementation can get bogged down trying to fit the system to your legacy processes.

Cloud ERP implementation time is much faster when you embrace the industry-standard processes built into ERP by default for common workflows. This fit-to-standards approach also has the knock-on effects of bringing greater efficiency to internal processes that are not actually key differentiators.

5. Customization Complexity

Customization takes time to develop, requires more cost and man-hours, and slows down business agility. If there’s one single challenge that harms cloud ERP implementation the most, it is a heavy emphasis on customization.

Overcoming this implementation challenge requires a mindset shift. Instead of customizing your cloud ERP system, focus instead on configuring it. An emphasis on configuration and extending the system with add-on modules instead of coding bespoke functionality can significantly reduce cloud ERP implementation times and cost. And the good news is that with modern cloud ERP, this focus on configuration over customization won’t actually reduce the capabilities of your system. You will just be accomplishing tasks with industry-standard methods instead of bespoke code.

6. Integration Problems

A mid-market consumer brand must connect its ERP with many other systems and services, including online marketplaces, retailer systems, supplier networks, and cloud services. Often, API limitations and inconsistent data structures create synchronization issues and operational silos that complicate ERP rollout, however.

Reducing integration problems takes place during the ERP selection process. The right cloud ERP solution for a consumer products brand will be highly modular and come with a host of common integration scenarios built in by default for nearly turnkey integrations. It will have an extensive marketplace of third-party add-on integrations that further extend connectivity. The right cloud ERP also will offer a low-code editor for easily creating custom integrations for less common scenarios.

7. Data Migration Headaches

All of your organization’s business data should be housed in your ERP solution of choice. But moving data from legacy systems into your new cloud ERP can be complicated by messy and incomplete data stores, and formats that don’t align with what your ERP expects. Data migration is a common cloud ERP implementation headache.

While moving data to your new cloud ERP does take work, the challenges of data migration can be significantly reduced by cleaning and standardizing legacy master data before import. Assign dedicated data “owners” to oversee each set of data that must be cleaned and imported, and take advantage of the data migration tools offered by your cloud ERP vendor.

8. Employee Resistance

Employees don’t like change, especially Sally in payroll. Even when a new cloud ERP implementation goes successfully from a technical perspective, employee resistance to the new system can derail its effectiveness.

Overcoming employee resistance for a successful cloud ERP implementation starts with seeking company-wide input during the planning stages so the changes meet actual employee needs. Building support for the rollout then includes consistent communication about the project and its benefits, and vocal executive support. This is followed by robust training and support during and after rollout so all employees get comfortable with the new system. Incentive programs that help encourage adoption help, too.

Get the Playbook for Effective Cloud ERP Rollout

For more than 20 years, we’ve been helping businesses roll out ERP on time and under budget as an SAP Gold Partner. We know how to help your business avoid the common cloud ERP implementation challenges and get a system that unlocks business growth.

Learn more about the ERP implementation journey by reading our CFO's Guide to ERP Evaluation or by calling one of our experienced consultants at (801) 642-0123. You can also write to us at info@nbs-us.com.