Research and understanding ERP systems for businesses has become a hot topic in various industries. That’s because 95% of companies implementing an ERP system have improved processes and 82% reach their ROI within their projected timeline.
But contrary to popular belief, ERP implementation is never a smooth process. Many implementations cost more than the intended budget, nearly half of companies involved in their first ERP implementation fail, and 51% of companies experience disruptions in their processes once the ERP goes live. These result from common issues like poor user experience, data inaccuracy, or bad analytics.
Sometimes business leaders assume that ERP implementation is a one size fits all solution for their business challenges in error. Here are more mistakes you can avoid during the implementation process.
Don’t Overlook Your Stakeholders
As you rush to implement your ERP solution, it is typical to forget the importance of having your stakeholders on board. Think about this:
- C-suite support ensures you have enough money to finish your project successfully. It also means you have willing participants you can designate to specific roles (take advantage of their expertise here) to overlook the entire project implementation
- Championing other executive stakeholders gives you a set of eyes that catch the costly mistakes you would otherwise miss or overlook. An IT department is better placed to configure and test the system, while a subject matter expert can help evaluate different ERP vendors
- Stakeholders want to know the new ERP system will benefit your entire organization and staff. This eases up the documentation, adoption, and system training processes of the implementation plan
Choose the right stakeholders, preferably excellent communicators and those with influence within your organization. Let them know about the project beforehand so they can offer advice or answer any queries your employees might have during and after implementation.
Learn more: Find out about different ERP Types by Industry and Deployment Options
Develop Your Plan With Clear Objectives And Management Strategies
It is not uncommon for companies to implement a new ERP system only to leave them unused when they cannot bring effective change management or fail to align with the business objectives. Therefore, plan for success from the onset with a clear set of goals and their adjacent metrics.
A project timeline and budget are objectives that should be painstakingly adhered to, so it’s essential to have a project manager that can ensure adherence to these objectives.
Must read: Ensuring a Successful ERP Implementation (Part 1) – Developing an Implementation Strategy
The project manager should have resource planning, critical thinking, and people skills, among others, to ensure they can harmonize vendors, business processes, and business employees and their different departments.
The right project manager expertly handles conflict, delegates tasks, and prioritizes resources. Additionally, the project manager should be responsible for ensuring your employees are ready to adapt to the new system through an organizational change management strategy.
Only Customize Where Necessary
Every ERP implementation requires some customization because a one size fits all solution is unlikely to meet your unique business needs. However, while the ERP systems are designed to meet a broad range of customizable features and integrations, incorporating many of them will only slow down your project.
Customization also adds to the complexity of the ERP system, making it difficult for your organization to adopt and use. Only customize where necessary. Incorporate strict project governance to ensure your customization doesn’t get out of hand.
Don’t Misuse Project Resources
Every resource at your disposal will determine whether you succeed, fail, or over-extend your project costs and timelines. Therefore, you must critically assess your resources and allocate them based on priority. Will it affect their daily tasks if you assign specific stakeholders to be project managers?
How will you reach their daily work targets if you delegate tasks to your employees? Do you need to outsource labor if you cannot pull your employees from their current duties?
Answering these questions will help you determine best how you can allocate your resources without putting a dent in your current business processes.
Don’t Underestimate Budget And Timeline
Most businesses go over budget because they expand their initial project, costing them three to four times the intended amount. There is also the risk of selling a shorter timeline to stakeholders and investors to safeguard the implementation project.
However, this is bound to deter the entire implementation process or lead to failure. Therefore, be honest and start your project with realistic expectations. Use your primary benchmarks and research to determine the estimated budget and timeline you will need to complete the entire project successfully.
Hire an expert on the subject, if you must, to help you calculate the project metrics accurately.
ERP implementations are complex. Don’t assume anything, expect bumps on the road, and prepare yourself for changes along the way. Don’t set unrealistic ERP implementation objectives or it will cost you more. Instead, ensure your business stakeholders support your project, be smart with your resource allocation, and keep a keen eye on your budget. This will position you among the 82% that happily enjoy an ROI after ERP implementation.
Is implementing an ERP system necessary for businesses?
It depends on your business needs. However, an ERP system is recommended for every business because it centralizes data, enhances collaboration, and has an ROI after a period.
What challenges can one face when implementing ERP?
Data accuracy, security, and migration are some of the expected challenges. Customizing ERP features is a complex process, and the cost of implementing ERP is also high.
Are there mistakes one can avoid during the implementation process?
Don’t assume that the ERP system solves all your business challenges. Ensure your stakeholders are on board the implementation project and create realistic expectations concerning the timeline and budget for the project.