By Forrest Burnson
Enterprise resource planning ERP software has gotten a bad rap over the years. A string of implementation failures in the 1990s and early 2000s—Hershey’s, Nike and Waste Management come to mind—dashed much of the early optimism surrounding the software, leading many executives to consider ERP more of a necessary evil than a golden goose.
This is understandable. Just as you might be afraid of air travel if you did nothing but watch plane disasters every day, so too might you be wary about implementing an ERP system if you did nothing but read the tech blogs that go wild when implementations go south. But just as you never hear about the thousands of flights that land safely every day, you rarely hear about the implementation projects that go smoothly.
Of course, that doesn’t mean we can’t learn from all this bad publicity. At Software Advice, we help prospective software buyers build a shortlist of ERP systems. We also analyzed 22 recent ERP implementation failures to better understand where companies went wrong—and what other organizations can learn from them.
Perhaps unsurprisingly, the most common culprit for implementation failure in the cases we studied was poor change management: a lack of employee training, poor planning, unrealistic deadlines, lack of user buy-in and so on. In fact, in only 18 percent of cases was the software itself at fault.
With that in mind, here are some tips for how you can avoid an ERP implementation nightmare in your business.
Know What You Need—and What You’re Buying
Too often, organizations buy systems that have greater functionality than they really need. It’s a fine line to walk: You want to ensure that the new system will be able to grow with your business, so you plan for features you may need down the road. At the same time, you don’t want to end up paying for applications and modules that you’ll never actually use.
On the flip side, it is critical to know exactly what an ERP vendor offers for a given product out of the box, and what you will need to add or customize. It is imperative that you fully document every technical requirement your organization has, and that you get in writing the requirements the vendor will fulfill.
Actively Involve Your IT Team
Your IT team will be on the front lines of the implementation project. Make sure you take the time to listen to their concerns, address any issues they bring up and ensure that they have the resources to execute on the project.
To some extent, the IT team should have a say when it comes to issues such as deadlines and how the system should be phased in. Understand what may constrain theirworkflow and ability to execute on key project deliverables—for example, keeping up with day-to-day tasks—and actively work with the team to mitigate any conflicts that arise as the result of juggling a massive implementation project.
Your IT team might also be more knowledgeable about particular vendors and each one’s advantages and disadvantages. So it’s critical to loop them in during the selection process and get their input before pulling the trigger on selecting a platform.
Ensure That Staff Is Adequately Trained
You may watch a sales demo of an ERP system and assume that employees will be able to learn how to use it on day one. However, this is rarely the case. Because implementing new ERP software means changing fundamental business processes, employees’ regular tasks may also change drastically.