Upgrading your business management software or launching an ERP project is a hugely important process that signifies a positive yet massive step forward for any business.
Unfortunately there is no easy way to implement any ERP solution, but by working with the right people with the experience to spot some of the common issues, you can work towards eliminating them; reducing the frustration of all stakeholders and managing their expectations from day one.
Whether you are switching to a different ERP vendor, upgrading to a new version of your current vendors ERP software, or implementing ERP for the first time, here are some of the top mistakes to avoid according to our ERP experts:
1. Not Building a Solid Business Case
An ERP project can take a lot of time and money. Your company will need lots of patience and plenty of perseverance combined with a complete knowledge of what you are doing and why you are doing it. In order to achieve this, you will need to build a solid business case which includes your aims and objectives, projected cost savings and intangible benefits, like improved staff morale and better customer service, etc.
You should clearly state the reasons for undertaking the project so that everyone in your business can fully understand it. Senior management should approve and sign off on the project and with their full support, you can get the entire company’s commitment to making the project successful.
Don’t make the critical error of forgetting about the business case once you have approval. It should continue to be a living, breathing document. Track the progress of the project and then update the business case continuously.
2. Not Assigning a Steering Group
An ERP project will overhaul your business processes, roles, standards and responsibilities, therefore you will need a group of effective and dedicated senior decision makers to oversee and steer the project. Conflicts can arise during a big project such as this, and a senior executive can assign accountability and make decisions.
This group should meet regularly to stay updated with the project and apply their input whenever necessary. They can keep track of project milestones and keep the CEO/Board informed about the progress of the project. Think of the group as the captain, steadily steering the ship so you can reach land safely.
3. Not Choosing the Correct Project Team Members
This can be tricky because often your best employees are busy managing other people or assignments. Still, an ERP implementation is important enough to warrant attention from at least some of your best people, if not all of them.
The ERP system will change the future of your business, so it should be treated accordingly. By the time the project goes live, you will realise firsthand the value that a well implemented system can add to the successful running of your business. You are investing in a solution that has to benefit and add value to your business for the next 10-15 years so you need the stars of the team to run the show from Day 1 to ensure you get maximum return on investment from your ERP system.
So assign your best people to your ERP project. It might be a challenge, but it will ensure good quality end results. You should never want to cut corners in terms of business talent. To ensure unity within the project team, choose people who gel well together to avoid any personality clashes or conflicts.
4. Treating your ERP Project as a Technical Change rather than a Business Change
Let’s face it, no one likes change, but in business, change is inevitable. Whether you like it or not, things will change because of your ERP system.
Some of the changes and alterations will relate to software while others will relate to your people and processes. This shift will affect people, their training, and the processes they use, but it will all be for the better.
5. Ignoring the Internal Culture of your Company
Your company is probably used to doing things in a certain way, and it is difficult to force change on your employees, partners or vendors, especially when they have operated in such a way for a long time. An ERP project is not an antidote that can cure all of your company’s problems. The implementation team has to work hard to improve your company’s processes for the better.
All businesses are accustomed to their own processes and whilst your ERP system should accommodate those business processes that add value, it shouldn’t go on supporting the ones that don’t. Take this opportunity, with the assistance of your ERP vendor, to specify ways that the ERP system could modify or enhance your ways of working to drive increased efficiency.
6. Dismissing the Advice of your ERP Consultant
It is vitally important to foster a good relationship between you, your designated ERP consultant and your business. You can use your ERP consultants’ vast knowledge of previous implementations with businesses similar to yours, to your benefit.
They will know the pitfalls to avoid, what has and hasn’t worked in the past and what caused previous ERP implementation failures. Listen to them closely and heed their advice as they are the experts. Disregarding a consultants advice almost always result in failure.
7. Not Addressing the Quality of your Data until it’s too Late
You should remember that any new system is only as good as the data entered into it. You need to have consistent and up-to-date data records so you can run your company in an efficient and effective manner.
Think about cleansing your data from the day you start the project. It can be disastrous for a company to hold off addressing the quality and accuracy of their data until late in the project. Note that ‘data’ has many forms and includes properties such as standards, integration, architecture, cleansing, and so on.
Determining what data standards to employ takes time. You may want to retain important information about customers, accounts and vendors. You should prioritise cleansing and then transfer the existing data so it doesn’t interfere or cause confusion.
8. Failing to Plan
It should be becoming clear now that adding an ERP system will cause you to replace all of your old redundant systems and programs. If you don’t have a concrete plan in place for your staff when implementing your ERP system, then you could suffer as it may cause an upheaval in business processes and operations.
Your team and users need time to get used to the new software and will have to go through a learning curve. You should expect to see a decrease in productivity for the short period of time it takes for users to get used to the new system.
However, through strong planning, risk analysis, and educating and training your staff members, you can minimise the dip, if not eliminate it.
9. Overlooked Requirements being Uncovered Late in the Process
You can never be too careful when implementing and analysing ERP software. If your team doesn’t analyse the project thoroughly, you could find out something crucial that has been overlooked deep into the implementation process.
If this happens then it is important to remember the following points:
- Never work backwards from the completion date, for you are almost guaranteeing project failure. Only on rare occasions does a project go smoothly from start to finish. You will encounter unexpected bottlenecks along the way. Be under no illusion, that setbacks may arise leading to deadlines having to be pushed out.
- Never skip a testing phase or any other phase just because you are behind schedule.
- Never cut corners just to get work done on time because the quality of the end product will decrease. Also, you might have to spend even more time fixing the errors. The only solution is to set realistic targets that have a clear outline of what you want to analyse and when and then stick to it. Also include a buffer to compensate for any unforeseen circumstances.
10. Assuming the Journey is Complete when the Project Goes Live
It would be fundamentally wrong to presume that when your ERP system goes live that it is the end of your journey because it is really just the beginning.
Your employees should keep nurturing the ERP system so that it can grow and mould itself to their needs and that of your business. You can customise the ERP software as time goes by. You will be continually learning, refining and tailoring the system to your unique business requirements.
It’s also important to remember that technology alone is not enough. It’s the people behind the software who must continue to innovate, work hard and work smart to ensure you fully maximise the capabilities of your ERP system.
Point of Note
Learning from and avoiding costly mistakes made by other businesses and people involved in ERP implementation in the past should take precedence over fancy technology wish lists any day. It’s the industry experience of your chosen vendor and their people who will help to guide you around the obstacles along the ERP implementation journey.