10 ERP Implementation Issues & Solutions
An ERP implementation is one of the most intense changes a company can undergo
16 april 2018
An ERP implementation is one of the most intense changes a company can undergo. It can cost from a couple of hunderd thousands to even millions. The change that the new system causes is going to be experienced by each employee of the company. And because of the scale of the project it can form, when not approached correctly, a minefield of mistakes, delays and hiccups.
Here is a Top 10 of ERP implementation issues and their solutions.
Not making a (clear) definition or planning of your requirements.
Your business processes and needs are unique for your business, so they should be the starting point for the decision-making proces of an (new) ERP system. These processes and needs should be written down and fully understood before a well-considered choice is made in the wide offer of ERP systems. With this examination a more productive conversation can be started with the software vendor. Now you know what you want and the vendor has a better view of how to help you. The vendor can help you make a selection in the many options and choices that best fit your company.
Unrealistic expectations and wishes.
An ERP system is not an 'Easy Button' that solves all your companies' problems easily and painlessly. A lot of companies forget to see the bigger picture.
An ERP system is showing that it was worth the investment in the long run and realise the implementation is not without effort and pain.
You can set the bar high for getting the optimal results, but not for instant satisfaction of your needs!
Not taking advantage of all features of the software.
Current ERP systems are more helpful then ever. The list of features keeps growing and expanding. A big mistake companies make is not fully taking advantage of the software's full potential. You and your ERP implementation team need to know the new system thoroughly and need to ask the vendor as much questions as possible. Your team needs to know how to use the ERP system for your business. The best way to get the highest ROI out of your ERP system is to use every feature for all of your business processes.
Less then half of companies understand the features if their software fully (source: Yearly ERP-report computerworld.nl). That is shocking knowing the investment of such a system can run up to millions.
Make a main list of all features, how much they are used and periodically update this list to see which one is being used most and is most efficient. This knowledge catalog can be used to train new employees, to write testscripts and to help with the audit, compliance and the report of demands.
Choosing an ill-fitting system.
Your business processes, needs and priorities are unique so a perfect fit does not exist. Your company has to search for a system that fits your needs the most. It is important to have a clear communication with the software vendor. Be upfront about your wishes and priorities and ask for references from the same business sector you operate in. You can exchange experiences with these companies and ask about the features. Can the vendor not give you at least 3 references? Look for another supplier.
Lack of leadership and engagement of the team.
As mentioned, an ERP implementation is an enormous endeavor and means a big change for each employee. Resistance to this change is a common reaction. Strong leadership, creating consensus and engaging employees in the choice of an new ERP system can be very beneficial for the quality of the implementation. The more people are involved in the decision making proces the more they want the implementation to go well and are willing to make an effort.
Set up an implementation team with a team leader that communicates with the vendor and sets out the direction of the project.
Not taking advantage of the training offer.
The software training vendors offer can be pricey but it will prevent you from a lot of headache after the implementation. Not knowing how to work with the ERP system optimally can cause a diminishing in productivity and a growing annoyance of the users towards the system. Attending a training of the vendor is usually the best choice because this party knows the software thoroughly. The more your team gets into the material, the better the transition to a new ERP system will take place.
Not looking at the Big Picture.
Choosing an ERP system is also a chance to critically look at your business processes and to see if they can be made more efficient. Perhaps the new system has a better inventory tracking or offers the chance to make your workflow more flexible. Be open to change your processes along the choice and implementation of a new ERP system.
Underestimating needed time and resources.
How to estimate the time needed for an ERP implementation? Divide the costs of the software by a 100. For instance, a software system and its implementation costs 20.000 euro. Divided by 100 it means the implementation needs 200 man hours or 5 weeks guided by a professional advisor. Want to do the implementation yourself? Double the man hours.
An implementation team that is not set up from the beginning of the project and/or does not consist of the right people.
Many companies are more concerned about the approval of the board than involving the most important people into the implementation team: Finance, Operations, Production, Inventory, Warehouse, IT. In other words, the people that are going to use the system. Get these involved and they sincerely going to work on a well implemented ERP system.
A multitasking team.
Get rid of multitasking and you will diminish delays. People work much slower when they are occupied with various tasks and constantly have to change in pace.
The first To Do for IT managers is to set up a priority system where not only the priorities are determined but also which problems need to be solved within that priority.
The first To Do for implementation managers is to set up a problem solving process where problems can be instantly addressed and solved to avoid delays.
Write this Top-10 on a big piece of paper (make a sketchnote of the list to make it more engaging), place it on the wall. Not only in the project room, also at the coffee machine so that each employee can see it. Tell your teammates during the weekly stand up how you contributed to avoid one of those issues and get ready for the ERP implementation waves.