Where does ERP failure really come from?

Here is a Question that is asked over and over again, where does ERP failure really come from? Ultimately, most problems can be summed up in one word: People.

Most projects begin life with the hopeful enthusiasm of anticipated triumph and success. However, success requires planning for details that do not become relevant until much later in project; training is a perfect example

In a number of cases the losses are blamed, at least in part, on their employees not understanding how to use their newly installed SAP ERP system, which they said worked just fine.

So, why is this? Well, basically, in the beginning of any big, shiny new project, what you have is a great deal of excitement over the benefits that it will bestow upon your organization streamlined processes, bottom-line savings, top line growth, more efficiency, reduced waste, better customer service, etc. The problem arises when this leads to a “hurry-up-and-get-things-done” approach.

Too much of the time companies are overly aggressive when they set their initial timelines, they see the statistics that show that many projects go over budget or take longer than expected, so they end up wanting a very aggressive project plan just so they can manage the time and budget.

Maybe your company has a history of talking-the-talk but, walking-the-walk? Different story! “This time it’s going to be different!,” exclaims the CEO slapping the table for emphasis and everyone’s on board. Here you go charging ahead, selecting a vendor, shun due diligence, and fail to define clear business requirements and goals. Perhaps you even know you don’t understand your business processes as well you need to but, “well now, ERP’s are designed to fix all that, Correct?

So how to you combat this? It’s simple: don’t do it! Rushing an ERP project to save time and money will cost you more in the end than you will ever save up front.

Done properly ERP can and will transform your business by automating and re-engineering its beating heart: its business processes. It is, therefore, in your best interest to take the time to understand how your business actually runs.

It is so so critical to understand the level of resource commitment the project will take.
So the objective is understand what you do as a business, understand what your systems currently support or don’t support and then have the vendors or integrators show you how their system can best support what it is you’ve brought to the table.

One of the biggest elements of any implementation where executives often fail is under estimating the time it will take to get the project done. Understanding things like time-to-value, change management, adoption, employee training, etc. are all down-played in favour of the perceived benefits the software will bring.

Here are a few suggestions of do’s and don’ts that will help:

Develop your own benchmarks; don’t rely on the vendor’s. Vendors can supply you with templates and best practices that can take you a good part of the way but you still need to define what constitutes success and failure, progress and set-backs, deadlines and must-haves, your “as-is” state verses your ideal “to-be” state.

Don’t rely on your vendor or SI to handle change management. It’s your company, so it’s your culture that has to change, not theirs. Change management is up to you and the difficulty or ease of this process is directly affected by expectations set early on. If you think it’s going to be easy and it’s not, then you are going to be in for some sleepless nights.

Define your business processes up front. Don’t’ let a vendor’s software define them for you. Most companies have no real idea how their business processes work in practice until, someone resigns. Suddenly all of that problem solving and expediting wisdom is gone. No software can replicate that knowledge. Find that someone! Talk to that someone, preferably in the beginning of the process, not when you’re trying to get that someone back.

All of this will be more time consuming up front, however will save lots of heartache and money at the back end when you find yourself fixing what should never have been broken in the first place.

It’s my belief some of the essential ingredients first require a strategy and a direction. So there has to be an earmarked plan and with that plan comes budgeting of time, resources and dollars to invest in that plan because a lot of corporations take a real penny pinching approach and it ends up costing them many times more than they ever anticipated as a result of that.

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