7 Reasons for ERP Implementation Failure: How to Avoid

ERP implementation failure is a dreaded truth. Check the Most Common Reasons for ERP Failure & How to Avoid them. Talk with Certified Microsoft Experts!

Enterprise Resource Planning (ERP) systems are designed to integrate and streamline an organization’s business processes into a single system, but there are chances of ERP Implementation Failure. This blog post will discuss the top 7 reasons for ERP implementation failure and how to avoid them. By understanding the causes of ERP failure, you can take the necessary steps to ensure the success of your own ERP implementation.

It is commonly said that technology should work for people rather than the other way around. So, what technology we are talking about right now is ERP. According to recent studies, approximately 30% of the implementations fail to achieve successful ERP implementations. But why are hundreds and millions of dollars spent on this implementation that goes to waste? While implementing an ERP, what are the pitfalls, what are the reasons for ERP failure and what are the things we should consider that will help us? Let’s find out in detail.

Pitfall No 1: Call for ERP

In order to avoid ERP Implementation Failure, the first question before the implementation starts, we need to ask ourselves, is, do we really need ERP?

People in the company may not be very happy with the existing software, or maybe they are not able to get the reports on time. Perhaps they are not happy with the accuracy of the data, and maybe the people who are in charge are not competent with all of these problems.

Now, if you ask the answer to these problems, your friends, business consultants, or any other experts, may say that the answer is ERP! One solution is a fancy, big, costly ERP solution for all these problems.

But guess what, you may be wrong. These problems can be simply solved by just:

• Maybe enhancing the existing software which you are using in the organization or
• Maybe by reengineering your business process.
• Or just by training your staff.

In short, before you make a decision to buy an ERP, just be very sure that you really need an ERP!  Because of this, you will never have to face a Failed ERP Implementation scenario.

Pitfall No 2: High Expectations

Any IT project always starts with high expectations, and the same scenario is associated with the ERP Project. The users believe this million-dollar software is a magic stick or a genie from a lamp that can fulfill all their wishes. However, this is not true. Moreover, this can lead to ERP Failure.

For this reason, you need to be very clear on:

• The scope of the Project.
• The desired outcome.
• What is the definition of your ERP implementation success?
• What are the financial justifications for an ERP project?

All these things should be set very correctly at the start of the Project, and if this is not done, good luck with the scope creep’s angry users and even missed deadlines.

Read More: Top 8 Cloud ERP Software: Features, Reviews, and Pricing

Pitfall No 3: Over-planning

Every ERP implementation project has a plan. Moreover, this plan can be a detailed plan which is done through MS Project, or it can be a rough plan which is done on the back of a rough paper or anywhere.

An ERP project has lots of known & unknowns. For example, when we are planning a project, we have decided on many things and planned in detail. However, there will be lots of things that will be discovered later when we go further in the Project. When a company tries to plan for every possible scenario, the Project can quickly become overwhelming. This can lead to ERP Implementation Failure with unrealistic deadlines and budget overruns.

For implementing ERP, we need to be very flexible. It’s not a day-by-day plan but, a visual plan. In short, people not from IT or not from the ERP implementation field can also relate to and can understand this plan.

Read More: 10 Cloud ERP Benefits to Cash Upon for Business Success

Pitfall No 4: Half Project Manager

When selecting an ERP software vendor/implementation partner, many companies make the mistake of focusing solely on the software itself. Mainly this is one of the reasons for ERP Implementation Failure. However, the Microsoft dynamics implementation partners you choose can significantly impact the success of your ERP.

Here are a few things to consider when selecting an ERP vendor:

• Does the vendor have a good reputation?
• Do they have experience implementing ERP software in your industry?
• Do they have a team of skilled consultants?
• Do they offer training and support?

Choosing the wrong ERP vendor can have serious consequences for your company. You could end up spending more money than you need to, or worse, your ERP implementation could fail completely. That’s why it’s important to do your research and choose a vendor that you can trust.

Pitfall No 5: Re-Implementing ERP

Another reason for ERP Implementation Failure is re-implementation. The consequences of re-implementing ERP can be significant for both the company and the employees. First and foremost, there will be a lot of changes to how the company operates. This can be disruptive to the business and cause many inconveniences for employees.

The company will also have to invest a lot of time and money in re-implementing the system, which can be a risky investment. There is also the possibility that the new system will not work as well as the old one, which could lead to even more problems.

In short, ERP implementation is a once-in-a-lifetime activity, or in the carrier of an employee, you do not implement an ERP every month or every year. Therefore, be careful and alert while implementing ERP. Talk from time to time with your ERP vendor for a successful outcome.

Pitfall No 6: Lack of Customization

It is a big problem while Implementing ERP. It can lead to ERP Failure directly. ERP is ready-made software, and the advantage of ready-made software is that it is quick and very easy to use. It is already tested, and there are no bugs in day-to-day usage.

However, suppose an ERP system is not properly customized to fit the specific needs of a business. In that case, it can introduce new problems and inefficiencies. One of the main consequences of a lack of customization in ERP is that it can lead to data silos. When businesses use ERP systems that are not customized to their needs, they often end up with duplicate or contradictory data in different parts of the system. This can make it difficult to make accurate decisions, as well as increase the amount of time and resources needed to maintain the system.

To avoid the one-size-fits-all routine and implementation failure risks, Microsoft chooses Certified Microsoft Dynamics Partners who can help you customize & implement Microsoft ERP Products as per your business processes.

Pitfall No 7: Training Strategy

One of the main reasons for ERP Implementation failure is training strategy.  There are a number of consequences associated with a lack of training in ERP systems. First and foremost, it can lead to errors and inefficiencies in the system itself. This can lead to lost productivity, as employees are forced to spend more time trying to figure out how to use the system correctly. In addition, a lack of training can lead to frustration and even resentment among employees, as they feel they are not being given the tools they need to succeed. Ultimately, a lack of training can severely impact the overall success of an ERP implementation.

Usually, when we are planning an ERP implementation, the plan includes a time when the consultants go and train users. But usually, as we know, the organization changes over time, and people will not stay in an organization forever. People are going to leave the company.

Therefore, you need people who are the trainers, which means when a consultant goes and trains a few people in the company, they should become the trainer. They should be the ones who are going to train their colleagues in the future.

Read More: What is an ERP Consultant & How to Choose the Best Consultant?

The Ball is in Your Court!

So, to conclude all these points, we can say that the ERP is the nervous system of any organization, and an ERP implementation is just like brain surgery. Therefore, when we are doing an implementation, we should consider that it should not be repeated. This means you don’t go to a doctor and do brain surgery more than once in your lifetime.

ERP implementation should be done very carefully. Moreover, while doing ERP implementation, there will be challenges and there will be problems. Still, if we consider mentioned pitfalls, we plan proactively to overcome all problems. However, precaution is better than cure. Always look for a free consultation before implementing ERP.