Why an ERP implementation fail?

ERP for a company is like oxygen to life, for organizations to coordinate their operations and processes. ERP plays a critical role in managing a company’s finances, human resource activities, supply chain, and a variety of other functions. The company can benefit in a variety of ways by implementing the most effective ERP, like data driven decision making which helps to address the dynamics of a business. To reap all these benefits of an ERP system that helps in increasing profitability you need to implement a company wide ERP system effectively.

However, ERP implementation is not always straightforward, and it might go wrong in various circumstances. Implementation failure might occur if you don’t plan carefully and don’t devote enough time and effort required for such transformation.

To ensure success of ERP implementation we need to understand some of the reasons “why ERP implementations fail?” Most common ones are listed below.

1. Selecting wrong ERP software

The selection procedure of an ERP software should not be taken lightly because not every software is going to work for your organization. Every organization is different and so are their needs. The decision should be made with caution. If you believe that any software will work for your company and you choose it based on incomplete knowledge, it will cause more harm than good.

For example, if you own a small business, you should not use a complex and expensive ERP system. So selection of the right ERP is essential for its successful implementation.

2. Resistance to change

When an organization implements ERP tools, the majority of its traditional processes are altered. Employees are human beings who always find it hard to change the way they do routine activities. Employees who work with traditional systems and ways: are slow to accept change because they have to get out of their comfort zones to get onto a new system. So there is always a resistance to changes as most of the job responsibilities shift and way of execution changes. As a result, it is critical for an organization onboarding a new ERP system to get a methodical way of bringing an enterprise wide change which is known as change management that includes educating its employees about the benefits of new ERP system and demonstrate to them how it will solve the majority of problems when compared to traditional way of working. So, organizations must invest in change management which includes employee training and provide them sufficient resources to understand the processes because forcing employees to accept change will not work. Allow employees enough time to learn the processes so that they are ready for upcoming projects.

3. Recruiting inexperienced implementation partner

Choosing the wrong ERP implementation partner or service provider will ensure implementation failure. Your service provider must have experience with your type of organization so that they completely understand your business process.

Check that the vendor’s product is compatible with your company’s systems.

Make certain that the vendor completely understands your industry and it’s business problems, understands the ERP system he is implementing and is prepared to provide customised ERP based on your requirements.

Also it is very important that you ask for the reference from your vendors. Every ERP vendor should give you the names of a few clients you can talk to to know about the implementation process and client satisfaction.

4. Unclear requirements

Unclear requirements often lead to failure of implementation as the project can cost more than you estimated. If an organization is not clear about their requirements that may result in customizing the ERP system again and again which in return will cost the organization more and will disturb overall budget. As a result, it is critical to understand your organisation’s requirements and communicate them clearly to your vendors.

5. Rushing the Implementation

Implementing an ERP system is not a simple task. Every organization must understand it will take time to customize new systems according to their requirements. Rushing and hurrying is not gonna help the organization and its goals.

So an organization must set realistic expectations and time needed for the same.

Conclusion

Implementing ERP can provide significant benefits to your organisation. It will help you manage all your business processes with ease. But you must understand it will take time and enough resources along with careful planning to have successful implementation. In case you need more help you may reach out our experts on info@korecent.com and we will be happy to help you achieve your goals.