Software selection and implementation can be one of the most costly and time consuming projects that your company embarks on. That’s why it’s imperative your ERP selection process is done right. You need to plan for every step of this process and have complete understanding of things like your budget, time required, people involved, and resources required. Failure to evaluate these important factors could mean ditching your final ERP selection and starting the process all over again after just a few years. You need to find a system that’s strong enough to handle your business for many years, while also dynamic enough to grow as your company grows.
It doesn’t matter if you’re a multi-billion dollar organization with locations spread out globally, or if you’re a smaller company with only a handful of employees, your ERP system needs to provide functionality for all of your business processes – from financials and HR to distribution and your supply chain. A good ERP system should streamline all of these processes and more from one single database. But be careful, because many solutions that call themselves ERP, really aren’t.
Since ERP systems entered the marketplace around 1990, there have been myriad software providers. Some create powerful, full-scale ERP systems, but others bill their solution as an ERP when, in reality, they’re only a small part or extension of a full system. For a business going through the ERP selection process, this can make things very complicated. And even when you do find a system with full ERP functionality, it still might not be the right fit for your industry or your company. This is why so many implementations end up being disastrous – because quick and uninformed decisions were made during the selection phase.
How many ERP implementations blow up in failure? Well, in 2001, Robbins-Gioia did a survey of 232 companies in multiple industries about the perceptions of their ERP implementation. What they found was that 51% viewed their implementations as unsuccessful. One decade later, Panorama Consulting Solutions did a similar report. But what they found was that 72% of ERP system implementations fail. So, what happened in 10 years that brought the failure rate from 51% to 72%? This could depend on several factors, but what it really boils down to is the growing need for ERP systems in businesses and a lack of qualified experts helping these companies throughout their selection and implementation processes.