Wednesday, February 22, 2012

Mistakes committed during implementation of an ERP system

As we have said it earlier, all ERP implementations cannot be 100 per cent successful and the reasons for this are various. Though this may be the ground reality, the failure percentages are getting reduced to the lowest, which is surely an encouraging development.

Poor planning is the main cause of ERP implementation failure. The scope, size, complexity and change required for a successful ERP implementation requires support from all corners of an organization. Without major decision makers involved from the beginning, critical steps and activities can be easily overlooked.

Change management is the second reason for any ERP implementation failure. Changing the corporate culture, business processes and employee training can be a long-term, uphill climb. Understanding change management and training are essential components to a successful ERP implementation. Employee training should begin before implementation, educating all employees of the benefits of using this new tool; making their jobs easier and the organization more efficient as a whole.

Poor selection of wrong ERP tool is another reason. Some of the biggest ERP implementation failures occur due a mismatch between the needs, processes and structure of your organization with the implemented software. This can create significant problems such as loss of productivity and time along with many of the new system's benefits. Therefore it is very important to select the right ERP system for your business to avoid any failure from that quarter.

Thoroughly understanding the complexity of an ERP implement would contribute to the success of its implementation. Some companies, on the process of cost-saving exercises, will run over budget on their ERP project by requiring their IT department to work overtime to complete the implementation. However, with inadequate skills and directives from the contracted software provider this exercise of the IT department will turn out to be disaster which would create only more knots in your ERP implementation than make any progress.

It is important consider your ERP system as a complex project. Considering the ERP system as a simple IT project can be the most costly mistake one can make. Without proper input company-wide, your ERP system will not be engineered and aligned to work with the business processes and needs of your employees.

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