ERP implementations are big projects. There are a lot of people involved as project resources and as system users. Managing the people is the biggest challenge.
Ziff Davis put together a nice white paper that addresses key reason that cause ERP implementations to fail. Here’s my comments on their points:
Setting unrealistic expectations at the outset – ERP systems are not magic. They take a lot of planning, execution, and training. And in the end, it’s software; pretty complex software. It has to be implemented properly and match your requirements, or it is pretty worthless. It’s hard work and will not be as easy as it looks at the start.
Failure to manage organizational change – My experience is that most users of a new ERP system are not involved in the selection process. Their exposure and perhaps their first knowledge of the system is when user training begins. This is not good. An ERP system affects not only users but other employees, vendors, and customers as well.
Not involving key stakeholders – If you don’t include a good sample of users in the selection process, don’t expect that users will be more than minimally cooperative when you go live with the new system.
Poor project management – You don’t often implement new ERP systems so it’s unlikely that you’ll be able to effectively manage an implementation project. Hire an expert.
Failure to manage business benefits – This is actually the most important point. You need to identify concrete reasons for implementing a new ERP system. The reasons should be the benefits you expect to receive from making the investment. If you can’t identify the benefits, don’t start the project. After the ERP implementation go back and make sure you are realizing the benefits you were expecting. If not, figure out why, and fix it.
You can download the white paper here: top-5-reasons-erp-implementations-fail-and-what-you-can-do-about-it.
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