An ERP implementation can make or break an organization.
On one hand, a properly implemented ERP system can reduce operational and administration costs by automating many manual processes. On the other, a poorly designed and implemented system can cripple a business.
While ERP implementations can be complex, there are usually a few main reasons they fail so often.
And that brings us to the million-dollar question
Why do ERP Implementations Fail?
The ERP Implementation fails because of internal resistance, misaligned expectations, poor process implementation, incompetent stakeholders, unaccounted supporting tools, and vaguely drafted training and digital adoption programs.
How to avoid such reasons?
1. Internal Resistance
“You cannot escape from your history. You cannot delete your history; you cannot obliterate your history. The only thing you can do is to change your history” -Dalai Lama
A successful ERP implementation happens when stakeholders of the company (including the people, processes, technology, and cultural aspect of the company) align and agree to the new system. This takes time and patience, but it must be done for all stakeholders to work effectively together.
So, some ERP implementations fail due to internal resistance. The other reasons are:
2. Lack of proper leadership (“If you do not have the right leaders, you have no chance to make a revolution”)
3. Incompetent C-level executives
This happens when senior executives of the company try to steer their organizations using legacy ERP software. This is because the existing organization culture was not built on top of a modern ERP, yet the C-level executives want to change this. This can cause an internal resistance.
4. The lack of ERP implementation teams
If an organization has not dedicated the time and the energy to implement the ERP, it will lack ERP expertise. For example, there may be only one ERP expert in the organization. This is a situation similar to when the organization's technology team has no one who can build its websites or apps. These teams will not be able to handle multiple large ERP implementations. This lack of ERP expertise will cause the ERP implementation to fail.
5. Unaccounted supporting tools
Some ERP implementations fail when the supporting tools are not taken into consideration. For example, a customer service representative that uses a CRM software to manage the sales orders needs the ERP software to support the sales orders. He cannot manage both the CRM software and the ERP software. As a result, he cannot provide effective service. This does not mean that an ERP implementation is failed. It means that the company needs to support its users with CRM software and ERP software.
6. Incompetent Stakeholders
This happens when executives, managers, team members, and functional managers are not committed to the ERP. As a result, they do not follow the ERP, thus causing an implementation to fail. They may ask for features to be added that the company does not have in the ERP software. This causes a failure.
7. Poor Process Implementation
If a company has not defined processes in the new ERP software, a failed implementation happens. The reason is that the entire new organization culture is not clear and defined. Without clearly defined processes, the new ERP software may not be used properly. In fact, some ERP implementations fail because of a lack of a defined implementation plan.
8. misaligned expectations
The ERP vendor and the business owner often have different goals, which can become a major problem during the implementation process.
It is very easy to understand what is necessary to make a business enterprise function smoothly and efficiently. But it is a different story to define what you really want, what you are expecting from an ERP implementation.
This is a challenging and complex process because the goals of the user, the internal staff and the vendors, should all be taken into consideration.
It is important to note that not all organizations have the same needs or want the same things. For example, when one organization is looking for a more simple and streamlined ERP implementation, it can be difficult to convince the owner and the stakeholders that such an implementation is not a good fit.
Business is complex and it is not just a matter of installing the system, but involves a set of processes, tasks and steps. It is for this reason that a business needs to choose an ERP partner that can help in managing all these aspects. We are business consulting firm and we know how to implement business management software for companies of all sizes. Whether the requirement is for a basic upgrade to an ERP or a complete new software solution, our team of ERP experts will ensure that you get the desired results.
In WINNOVIA, We can help you make the ERP software in a way that it suits your needs, and add value to your organization in terms of the productivity, cost saving and time to market. We can also ensure that your new or replacement software is built to meet the business requirements. We ensure that the implementation is completed successfully and on time.