6 Reasons ERP Projects Fail and How to Avoid Them
ERP software promises great improvements to the manufacturing and distribution business processes. From the shop floor to the management office, ERP technology can streamline all parts of your business. In fact, 95% of businesses improve some or all of their organizational processes through ERP software. That being said, ERP projects fail all the time.
So, what causes projects to fail? And how can you mitigate those risks?
1. Lack of Executive Support
Far too frequently, executives aren’t fully on board with ERP implementation. They may not be convinced of the effectiveness of the software or aware of what it takes to execute the project. This creates major obstacles to reaching the critical go-live date. Your C-Suite will oversee the financial aspect of the implementation and establish the direction of the project. When executives are on your side, it’s much easier to get the rest of the organization behind the new technology.
To earn the support of your C-Suite, we recommend demonstrating the value that your ERP system will bring to the company. Create a compelling business case by estimating all the benefits that will come from the ERP system and the corresponding ROI. Further, keep the lines of communication open–if requirements change, notify your leadership team and get their approval for budget modifications. When executives are informed of the consequent value of ERP, they will likely be more helpful in steering your implementation to success.
2. Technical Focus Rather Than Business Focus
For a successful software project, we recommend modeling your software implementation as a business transformation rather than a technology project. By aligning your software to your business process, you can completely transform your business into a cutting-edge enterprise. Business leaders that understand their software implementations have the potential to improve all facets of the organization tend to have more successful results. However, by neglecting the business process aspect of the project, your software will not achieve everything you would like it to, and it may even fail.
Business process modeling sets the foundation for project success, providing an opportunity to uncover current pain points and plan for future improvements. By conducting a business audit and determining how your software will improve your business, you can see the most ROI and ensure longevity in your project’s success.
3. Poor Teamwork
Your IT team should not be the only department working on your ERP implementation project. Implementation projects impact the entire organization; in that way, you should have representation from all sectors of the business. Decision-makers from all departments should be deeply involved to ensure the solution supports all organizational processes and business requirements.
That being said, it is often difficult to get your entire team on the same page. IT personnel may struggle to grasp business operations, while your HR team representations might not understand the technical concerns of the software. Thus, resulting in miscommunications, confusion, and frustration. And it can cause an implementation that falls short of expectations.
By outlining clear project roles and regular communication, you can strengthen the team and get everyone on the same page. At the project kick-off, we recommend ensuring everyone understands their roles and how to report issues. Schedule frequent check-ins and meetings for the entire team to get updates on the project’s progress. Document and share goals or changes to keep everyone abreast of important information. Additionally, select a project leader that can manage communication between your stakeholders and team members. By taking these steps, you can help your team work together and understand both the technical and functional aspects of the project.
4. Ill-Defined Goals
Projects will inevitably veer off track if your team doesn’t clearly define the goals and objectives. If you don’t understand your company’s current pain points and necessary improvements, it will be extremely difficult to implement ERP technology that will improve the business process. When project teams neglect to establish clearly defined project goals, they put their business at risk of investing in the wrong software, experiencing scope creep, or skipping essential tasks in the implementation.
So, to see real improvements and optimized software, your team should focus on measurable, specific, and achievable goals. What do you want the business to look like at the end of the implementation? How will ERP help you reach those goals? What part will the project team play in the process? These are all questions we recommend seeking to answer in the goal-setting process.
5. Unrealistic Expectations
Underestimating or lowballing the necessary resources it takes to implement ERP is a major cause for an implementation failure. If your team doesn’t have realistic expectations, you may end up cutting corners, going over budget, and pushing back your timeline. As previously mentioned, setting realistic goals at the beginning of your project will help you achieve realistic expectations. Further, we recommend considering what has worked for businesses of similar size and industry and what are the important successes you will need to achieve for your project to prosper.
6. Unprepared Project Team
Does anyone in your office have extensive experience with ERP customization, data migration, software testing, and module rollouts? Many small to mid-sized businesses have little-to-no IT personnel, meaning they don’t have the expertise required to pull off a successful software implementation project. And even if you do have a sizeable IT team, they likely don’t have the time to commit to an ERP implementation on top of their other day-to-day responsibilities.
The top ERP consultants have decades of experience with software projects and multiple industries. Additionally, they have existing relationships with vendors. Consultants can smoothly guide you through each stage of the implementation project through a methodology they have already mastered, and they will be able to align your unique processes to maximize the value of your investment.
Don’t be discouraged by ERP failure stories and statistics – consultants have the expertise to mitigate risk and ensure your implementation doesn’t fall victim to common pitfalls. That’s especially true of the consultants at Datix. As an Infor partner with over 20 years of experience, we provide cutting edge, premier software solutions. Plus, our consultants have experience in multiple manufacturing and distribution environments, equipping our consultants with the skills to meet every client’s unique business requirements. Not to mention, we are a one stop shop for robust enterprise software solutions.
Don’t let your business fall victim to ERP implementation failure. Contact the Datix experts today!