Why ERP projects fail

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Mark Wilson | Chief Executive Officer | EMEA&I  SYSPRO Africa | mail me |


ERP systems require a certain level of planning and coordination to build and maintain. Unfortunately, many ERP projects ultimately fail as they are driven by short-term goals that have little relevance to the long-term success of an organisation.

The reason an organisation is implementing a new ERP system in the first place, is because there are business benefits to be had. A successful implementation lays the foundation on which companies expand their businesses, launch new initiatives and improve existing operations to grow revenue and reduce costs. ERP systems are used by almost every department in a company, hence a successful ERP implementation is vital.

The fundamental problem in ERP implementation is many organisations think of it as only a one-off project. A ERP implementation is a long-term project whose operational success will have long-term effects on the business. However, there are numerous stories about failed ERP implementations which were ultimately a loss in time and money.

There are several reasons why an implementation may not go to plan, many of them intertwined, but can be overcome with the right partner and implementation methodology.

Lack of planning around business objectives

ERP implementation requires extremely detailed and coordinated planning. There are numerous stories of failed ERP deployment projects. More often than not, these failures can be attributed to businesses overlooking the planning stage.

Many people dramatically underestimate the level of commitment needed from all levels of staff to implement ERP successfully. Before embarking on an ERP implementation, you need to clearly define your post implementation objectives.

System implementation will also likely fail when a project specification has not been well defined and understood. A project’s chances of success are far greater when all of the requirements are clearly delineated at the outset. ERP impacts on every aspect of your business. A system that is used throughout the company requires companywide co-operation – and insight from all departments is vital for a well-rounded ERP solution.

Keep testing after implementation

Testing is rarely given the attention it deserves. Failing to test correctly and thoroughly will result in you not truly understanding how the ERP system works and which areas require improvement. It’s essential to dedicate time to mapping and cleansing your test data, and practising the processes, even if certain processes are only undertaken once a year or even less.

Businesses need to be able to adapt to the inevitable future changes in processes, staff, customers and technology – to name but a few. Investing in an annual health check to ensure processes and systems remain aligned, creating a training plan for new starters, and taking advantage of ERP system vendor upgrades and enhancements are all vital steps to take to ensure your system continues to add value.

The IDEAL method of implementation

Most ERP implementation failures have one thing in common, a lack of forethought. While ERP is an important part of any business infrastructure, most businesses fail at implementation because they do not have a strategy in place to handle the unexpected.

This is why choosing an ERP implementation partner with experience and exposure within several key industries, that will bring knowledge to the ERP implementation process. Our IDEAL implementation methodology uses best practices developed over many years of experience and facilitates a successful implementation and a roadmap to reaping a return on investment on the project for many years to come.

The foundation of IDEAL lies in the project administration, controls and governance activities that we perform throughout the implementation. Best practices in project management ensure that the project is meeting its defined objectives and remains on track within the defined scope. It also ensures costs are kept within budget and that resources are being managed effectively.

Without a solid understanding of the ERP implementation process, this type of incident can happen – causing critical business processes to be disrupted during a fragile time of operational change.


 



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