Enterprise resource planning (ERP) systems are popular for their benefits like streamlining an organisation’s processes and increasing productivity. However, using such a system also comes with risks. For one, improper implementation of ERP systems can lead to loss of time, labour and, most significantly, capital.

Unfortunately, over one-fourth of ERP implementations fail. Still, don’t be discouraged from using ERP solutions, as they can do wonders for your company. To help you out, consider these ERP implementation tips to smoothly incorporate the system into your corporation:

Know what you’re implementing

Once a problem occurs within the organisation, plenty of business owners immediately decide that they need to update their ERP or software applications. For instance, they may start expanding overseas, forcing the company to add new currency. Additionally, there may be a mandate from higher-ups that demand the use of new software. In either circumstance, one common solution is to look for a new application.

Unfortunately, once users subscribe to or buy a new implementation process, they may later find out that the tool doesn’t really solve the problem the way they expect it would. To help prevent this problem from happening, it’s crucial for you to thoroughly read the vendor’s contract, website and order form to fully comprehend what you’re buying. Additionally, during your ERP system selection journey, you can even call the vendors about some questions you have about their product.

Understanding every detail of the software and partnering with a reliable provider will ensure that the implementation process is a success.

Have a clear goal

Once you know what and why you’re implementing, the next step is to have a consensus on the problems that need to be addressed, the desired outcome and the financial resources you need for such a system. If you don’t set a goal for the whole ERP implementation process, then you won’t be able to gauge if the software is, indeed, responsible for your company’s growth.

On the other hand, by having a clear goal before ERP implementation, not only will you fully optimise the software, but you will know if the software is bringing benefits instead of problems to your business.

Here are some common benefits of ERP software:

Better reporting tools that provide real-time information
Better data and cloud security
Better customer service and access to customer information
Improved inventory costs
Boosted cash flow
Cost savings

Employees are reluctant to change

Technological upgrades are considered a welcome and innovative change for the company. But this isn’t necessarily the case for most employees. Employees, especially those who have been employed for many years, get accustomed to doing certain business processes. Hence, if they’re presented with a new and efficient method to perform the same task, they may be reluctant to change their habits. This reluctance is a common reason the implementation of an ERP system fails.

One way to address this issue is to ensure the employees are involved. This means that you must inform the employees about the upcoming software. You can inform them via updates, company-wide announcements or emails. In addition to involving employees, you also have to prepare them for any changes. You can do so by conducting webinars, lectures and workshops, as well as handing out reference materials that are easy to understand.

By involving and preparing employees, even those who are initially reluctant will soon realise that adopting ERP solutions is more efficient than their routine working processes.

Inadequate testing

In truth, ERP implementation is inherently complex, which is why the failure rates are high––more than 75%––making such a move one of the costliest mistakes a business makes. However, by thoroughly testing the software, you’ll avoid any expensive, unexpected issues. This means that quality testing will lessen the chances of failure, helping you avoid any financial loss.

Moreover, by adequately testing the software, you can make sure that the application can properly identify any areas of improvement your business needs to make. So, if you don’t want to experience ERP failure, test the system’s critical processes, functionality and overall performance.

Final words

Regardless of the size of your company, implementing a new ERP system is a decision that requires heavy planning. Without the much-needed precautions, ERP implementation may cost your business time and money, which is often the case for the majority of unprepared organisations.

Moreover, as this system will affect all areas of your organisation and demand a lot of your time, resources and money, you surely don’t want your efforts to go down the drain. Fortunately, the tips mentioned above will serve as stepping stones to ensure you’ll avoid ERP implementation failure.

References

“2017 Report on ERP Systems & Enterprise Software”, Source: https://www.panorama-consulting.com/wp-content/uploads/2017/07/2017-ERP-Report.pdf
“Benefits of ERP: Advantages, Disadvantages & Selecting an Enterprise Resource Planning System”, Source: https://terillium.com/benefits-of-erp/
“Two Big Reasons Why ERP Implementations Have Failure Rates Higher than 50%”, Source: pemeco.com/two-big-reasons-erp-implementation-failure/