How to avoid an ERP catastrophe
ERP systems bring immeasurable benefits to organisations, playing a crucial role in keeping all back office operations running smoothly. It is, however, easy to underestimate the time, effort and resources needed to successfully implement and maintain an ERP. Analysts have found that roughly 75 percent of ERP projects fail. Time and time again, businesses have been led astray by common misconceptions about ERPs which results in costly mistakes and lasting damages.
Unfortunately, no company is immune to the huge impacts of an ERP failure but all organisations can puts steps in place in avoid catastrophe.
Plan Times Scales Accordingly
A successful ERP implementation takes time. Over half of all ERP projects take longer to implement than originally projected. One of the biggest mistakes made when it comes to ERPs is relying on a new system to perform functions by a certain date. Rushing to meet deadlines should never be part of the implementation plan, so remain flexible when it comes to the project timeline.
Not only is it critical to plan for additional time to get a new or upgraded ERP system running properly, but it’s important not to underestimate the time needed to properly maintain it going forward. As a business grows, so does the increased complexity of its ERP. Make sure you’re prepared to handle the time and resources needed to provide continual IT support and maintenance for an ERP.
Set a Realistic Budget
An ERP can be a very powerful tool for your business and but can come at a costs. ERPs require large amounts of time and labour, as well as additional costs in the form of licensing, maintenance, development and hardware fees. Underestimating how much an ERP will cost your business can be detrimental.
Three quarters of ERP projects came is over budget in 2016, so accurate planning and evaluation is key. To ensure the implementation process is smooth and cost efficient, benchmark against the ERP deployments of similar organisations and ensure your scope is as comprehensive as possible. It’s also important not to overlook the smaller costs that may come up along the way, such as staff training, bug fixes and data conversion.
Be Patient and Prepared to Problem Solve
Addressing bugs is a necessary part of any successful implementation. To avoid any major disruptions to your organisation, use a phased approach to deploying a new or upgraded ERP. Rather than immediately switching to a new or upgraded system, give your organisation enough time to properly test it in parallel with your existing system.
Most companies will need to customise their ERP, which requires additional time to implement and test. It’s also important to note that while customisations may work properly in the short term, there’s a chance you may face difficulties in supporting customisations in the long term. Customisations within your ERP system may require additional resources or third-party support to deploy upgrades or ensure compliance with evolving industry best practices.
Know What You Really Need
ERPs are instrumental in the back-end management of a company, but they are not a solution to every business challenge. These systems play a very specific role and are not equipped to take on every task. It may be more efficient to opt for a third-party solution that can integrate with existing ERPs.
Make sure an ERP system can handle the specific tasks you need before jumping into an implementation. By keeping an ERP’s limitations in mind, you will have a better chance of ensuring you are managing your back-office systems and data in the most efficient way possible.
It can be easy to get overwhelmed by the challenges in getting an ERP project up and running. While ERP systems can come with complexities and pain points, having a thoughtful and strategic approach makes all the difference. By learning from some of the most common ERP mistakes, you can drive efficiency and security in your business and improve operations management.