There is very little that has a greater effect on a company’s success than its ERP system. That system functions as both the memory and conscience of the business and forms the backbone of every business process. Yet many companies fall prey to the same common ERP implementation errors, which may cause the project to fail or be less effective than it could have been. Here’s a look at those common traps and tips on how to avoid them.
No Full-Time Project Leader
An ERP system has tendrils in every part of the business and it is, therefore, a complex project involving multiple people from every department and many decisions that affect them all. Most companies wouldn’t plan to build a new brewery without a project plan and a strong project leader, yet they neglect to develop a plan and appoint a full-time project leader with the authority to arbitrate decisions. The project is too complex and time-consuming to be done as an additional task along with an already full plate. It can’t be done effectively by an external consultant or a person with no organizational clout. Without a full-time, in-house project leader reporting directly to the project steering committee, the ERP implementation will not do as well as it should.
Selecting the Wrong Software
There are hundreds of ERP software applications. Some are broad in scope and designed to fit many industries. Others are unfocused and don’t fit any industry well. The best solution, especially for small or mid-sized companies in less than mainstream industries—craft breweries, for example—are ERP systems designed specifically for that industry. By selecting a solution designed for your industry, you can be assured that the business processes reflect industry best practices and you will then minimize the number of customizations and workarounds you need.
Lack of Goals
If you don’t know why you are implementing a new ERP system, you’ll never know if you have been successful. Take the time to define your goals so that you can express them in measurable ways. “Reducing order cycle time to less than one day” is a better goal than “entering orders faster.”
Without goals and a strong project lead, many companies drift through the ERP implementation process and add new processes, customizations or departments to every phase of the project. Resist that temptation by sticking to your goals.
Lack of Training
Companies have limited resources, and training often seems like an easy place to cut costs. Training a few people who are then tasked with training everybody else seems like a good idea until you realize that most people only retain about 25 percent of what they’ve learned after a few weeks. Without proper training, your team will not know what your new ERP system is capable of, and you will not achieve the ROI you expected because of it.
Treating ERP Like an IT Project
ERP supports your business. It may run on computers, but that doesn’t mean it’s an IT project. You need to make the line of business people responsible for its success, or it won’t succeed.
If many of these points of failure sound like they stem from lack of management commitment, you get the point. Without management commitment, the project is doomed. Make it the top priority for people charged with the ERP implementation, and take the time to get involved. With management commitment, an ERP implementation has a good shot at success. Without it, ERP is doomed to failure.
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