ERP is known for being expensive, complicated, and difficult to manage. It’s one of the most intricate tasks a business can take on, and while the highly increasing demands for automation and cloud computing technology are part of the solution, they are not sufficient.
A typical thought process to any obstacle in life is to identify the problem, address it, and then implement the right solution to resolve it. The same approach applies when working with ERP transformation operations. Alarmingly, up to 75 % of ERP implementations are said to fail the first time around, according to Gartner. While global consultancy, McKinsey, estimates a digital transformation failure rate of 70 %. This gives you an indication of how critical it is for the sake of all functions across your organization to ensure that sufficient attention is paid to all aspects of your integration.
But first, prior to starting any project and to mitigate risks and ensure success, you need to thoroughly understand some of the reasons why ERP implementations fail.
6 Reasons for ERP Implementation Failure:
1 – Ineffective Project Teams
Your core team members need to have the relevant skills, expertise, and resources. This is no exception. Executives, project managers, seniors from various departments, IT specialists, and end-users need to give input on insights and the practical support needed for a valuable, customized, and highly efficient ERP solution.
“Clearly define roles and responsibilities from the onset. The best decisions will come from those who are familiar with the system and its processes and have adequate capabilities, Mint ensures these skills are share from the outset of our projects”, says Mint Group D365 Business Development Lead, Nikki Isherwood.
2 – Poorly Defined Goals
Clearly defining what you want to achieve is just as important as choosing the right team. You should have a clear, documented priority list. Examining your business needs and requirements will assist in aggressively pursuing any pain points that the divisions in your organization are experiencing. Having a solid plan will form the roadmap you should follow, and assist you in getting back on track, when you have derailed along the way. Thus, you will need to constantly and effectively reassess and audit your milestones.
3 – Inadequate Testing
Thorough and frequent testing, or the lack of, can make or break your project. Without the testing of every business-critical process and progress, go-live trials, and the integration of new systems, to traditional ones, your implementation efforts are bound to collapse.
You need to ensure that the holistic system, including your software applications, servers, databases, and hardware, is working seamlessly and efficiently. On-line solutions from Microsoft mitigate the risk significantly, using our structured environments and methodology.
“Testing is a significant part of learning and correcting. The less you test your ERP implementation, the less knowledge, training, and understanding you will have”, says Isherwood.
4 – Unforeseen Expenses
Most implementations cost three to four times more than what was initially budgeted. Maintenance costs, continued improvements by the developer, fixing malfunctions, and incremental payroll costs, will all accumulate, with the purpose to provide you with a highly successful and operational ERP system.
“Project mismanagement, lack of planning, and poor user experiences are likely to increase project costs. Have your mindset on your success. Budget for success and not because you want to save money in as many areas as you can. A realistic budget upfront is essential.”, says Isherwood.
5 – Failing to Embrace Change
While you may be enthusiastic about reaping the benefits of a powerful ERP platform, you may also be overwhelmed with the drastic change that comes across your business. To avoid having a failed ERP, you should invest in digitally enabling your team- have the relevant training and support to empower the business to embrace disruption, and better handle the changes and expectations, brought by the adoption of new technologies.
6 – Not Selecting the Right ERP Partner
The ERP partner that you assign, and the ERP vendor selection criteria are important. Considering that your partner will become a part of your business, in the long run, and not just in the implementation stage, you will have to take some time in finding a compatible one.
Industry-specific business insights and expertise are critical. The right partner will be able to leverage their expertise throughout the implementation process and fit it, to the company’s needs.
“In the selection process, you should ask relevant questions, commit to watching a demo and obtain customer referrals. These are just some of the ways in which you can determine a partner’s competency, customization, and integration capabilities, amongst other qualities”, says Isherwood.
Mint Group USA brings a pool of possibilities by integrating traditional ERP operations, with modern business applications. Employing Mint as a partner, will ensure that you adapt and stay relevant, using cutting-edge technology solutions. Mint’s credibility is further strengthened by the company’s Gold Microsoft Partner certification and its’s commitment to creating tomorrow, by inspiring both its employees and clients, to reach their full potential.
An ERP implementation is never complete and there will always be something to improve, especially with the rapidly changing work environment. Organizations need to invest in the right diagnostic evaluation of what they need, how much they are willing to spend, and what exactly it is that they want to achieve, for the successful execution of their digital transformation goals. At the core of this, is choosing the right ERP partner, with trusted expertise to lead a successful ERP implementation.
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