Five Common ERP Implementation Problems

Business owners can be easily motivated to implement an expensive, resource-draining Enterprise Resource Planning solution by the potential benefits that can accrue. However, more ERP projects fail than the vendors selling those solutions acknowledge, and the costs can be substantial.

Before you kick-off an ERP project, research the popular implementation methodologies to avoid repeating the mistakes others have made before you. In this article, we describe five common problems that can derail an ERP implementation. There are others so plan for the unexpected and adhere to best practices as often as you can.

ERP Implementation Problem #1 – The Requirements of the Company Don't Match the Capabilities of the Software

Many ERP projects fail before the software is even loaded because the application functionality does not match the company’s requirements. There are no shortcuts around initial fact-finding to determine the company’s business needs and requirements – today and in the foreseeable future. There are literally hundreds of ERP solutions available in the market.

Choosing a solution that has more functionality than required can be just as disastrous and selecting one that lacks functionality, if it adds unneeded complexity to, what should be, routine transactions. Make sure you understand what your business requires, then look at the different options provided by the vendors. Don’t be swayed by grandiose claims and unneeded bells and whistles, but do select a stable and reputable vendor that offers the ERP best suited for your organization.

ERP Implementation Problem #2 – Inadequate Planning and Lack of an Executive Sponsor

The implementation of an ERP is an extensive, complicated process that typically involves significant changes to existing processes and practices company-wide. There will be resistance to change and competing agendas. First and foremost, the project will require executive leadership to provide direction and resolve disputes.

That leader must have ultimate authority over the implementation team and be granted horizontal oversight over affected departments by other managers. His or her first instructions should be to formulate a strong implementation plan that identifies the resources and budget required, and a final task should ensure thorough testing is executed prior to go-live.

ERP Implementation Problem #3 – Poor Change Management and User Training

Implementing ERP necessitates change in the organization and without a solid change management plan, chaos can ensue. The plan’s objective should be to maximize ERP’s benefits while lowering its risks to the organization. The plan should avoid reactive change, which is caused by external influences, and promote proactive, or goal oriented, change. Because change invokes psychological resistance from employees, user training is critical.

Acclimating personnel to the new system before go-live accelerates adoption rates and minimizes any drop in productivity. If the company installs ERP, yet no one knows how to use it, the costs can be greater than merely wasted time and resources – there is a real threat to customer relationships and revenue generation. Training should begin long before the implementation process commences.

ERP Implementation Problem #4 – Miscalculation of Resources and Budget Required