In Part 1, we discussed the importance of developing an implementation strategy for ensuring a successful ERP implementation for your business. In part 2, we focus on the most common ways ERP implementations fail so yours doesn’t have to.
ERP implementations are a process. By the time you’ve identified which system will bring the most impact to your business and decide to implement the new system, you’ve done a lot of legwork to get here. Please don’t throw it all away. To ensure your ERP implementation is a success, we’ve identified some of the pitfalls you might otherwise not have prepared for.
There are many reasons an ERP implementation can fail. Whether a failure occurs due to ineffective requirements gathering, lack of change management, poor communication, the list goes on. But we believe there are three key reasons that an implementation strategy fails.
Lack of Commitment
A lack of commitment to any project is a great way to drive it into the ground. An ERP project especially needs to be done with intention, so if your organization approaches its ERP implementation as something to hurry up and get finished, you’ve likely failed before really getting started.
Misalignment in Your Team
Strategies, ideas, and directions for the future should align with your organization’s operations structure, technological structure, and human resources structure.
An ERP system involves cross-functional, cross-departmental business processes, so the implementation team should represent individuals who understand their department’s functions as well as how other departments operate for better business processes across the board. When assembling your team, evaluate capabilities across multiple dimensions, including:
- department function expertise
- cross-department process awareness
- primary ERP capabilities
- communication skills
- documentation capabilities
- communication skills
- flexibility to change
Lack of Support / Leadership Engagement
If your company fails to get the buy-in of staff and leadership alike, you will fail to deliver on your implementation strategy. The strategy needs to be a cumulative effort, developed through input from the whole company and not just an executive team. Once everyone feels included, there’s less resistance to the changes that come with the strategy.
So in what ways can your organization develop a winning strategy?
Engage the right people
You already know the importance of engaging the executive team, but what about other essential staff who influence the company, the culture, and who can guide people from multiple departments? These are pivotal folks, people who will be able to convey how the rest of the company is handling upcoming changes as well as effectively assisting the execution of your implementation strategy.
Create realistic, achievable, and measurable goals
A great way to align the right people includes an excellent scope of work document. Breaking out the specific tasks and deadlines of your project is essential to a successful implementation. An ERP scope of work helps get your entire team, both inside and outside of your company, on the same page and keeps everyone working toward the same goal in the same time frame.
- Scope statement: An overview of the project as a whole, timelines, costs, strategies, end goals, etc.
- Objectives: Outline the actions to be taken and steps to complete the project.
- Potential project risks and mitigation: Consider all the obstacles to implementation and how setbacks will be handled.
- Roles and responsibilities: Have these clearly outlined, written down, distributed, and made available to everyone involved in the project. It is critical to have everyone on the same page.
- Assumptions: Don’t assume that your consultant has thought of everything, they don’t know your business like you do. Even if you think it is a point that does not need discussion, be sure to put everything on the table.
- Deliverables: Ensure all aspects of the project are in writing and available to everyone involved. Examples include the scope of work itself, project plans, changes, training manuals, etc.
- A list of functional requirements: Observe the operational needs of each department area and list requirements and associated details, the more thorough, the better.
- Project change management: ERP implementation is a software project that will likely need to change over the course of the effort. How will you account for changes? While changes are to be expected, there has to be some foundation for what is acceptable and what isn’t. Be sure to get in writing who has the authority to make changes and who needs to approve them. Make sure change request forms are ready to go and available.
- Issue escalation procedures: Who will handle issues if/when they come up? Is the team aware of who that person is? That way issues can be dealt with quickly and effectively.
Lean on Your Vendor
Any reputable ERP software vendor you choose will offer the support to ensure the system rollout goes as smoothly as possible. Recognize going in that there will be bumps in the road, but your software vendor is your partner in this technology upgrade, so thoroughly investigate your vendor options.
Some organizations get extraordinarily lucky and experience a perfectly smooth rollout, but it is better to anticipate some snags. Lean on your vendor and ensure they understand your specific needs so when issues arise for which your project team is unprepared, your vendor can help.
Think of the relationship like a marriage—make sure you’re on the same page when you begin the relationship and make sure you’re aligned on where the relationship is going.
Ensure that your vendor has its own growth plans and how their business will evolve in the future. Today’s need will not be what you need in five years, and what your vendor offers today may not be what they offer tomorrow.
Ensuring a successful ERP implementation for your organization is possible! Commit, align and support your implementation team. Engage the right people from the executive suite and each department in your company. Make the objectives clear and accessible, then find the vendor that aligns with your business and its objectives.
Find out how we can take you to peak performance in the accounting department and across your entire footprint with speed, accuracy, and insight through modern enterprise resource planning.