Many businesses look to an ERP to improve business processes and support growth throughout the organisation but up to 50% of all ERP projects fail due to overspending, missed deadlines or miscommunicated requirements–leaving you with a system not fit for purpose. Your ERP partner has a significant impact on the success of your project so choosing a partner that understands your business, its needs, and your industry is imperative.
We have compiled a list of reasons why some ERP projects can fail.
Training should be offered post-installation, prior to the go-live date, to ensure its users–which may be across multiple departments–can utilise the system to its full potential to achieve the desired business goals outlined at the beginning of the project. However, this isn’t always the case. Insufficient training from your ERP partner will often lead to users utilising the support hours offered in post-installation (usually used for customisations or software repairs). Using support hours on training will mean that if any real issues do occur then the system will fail unless further support is provided at an additional cost, leaving the project overbudget or in trouble of failing all together.
Underestimating the Total Cost of Ownership
Did you know that 74% of ERP projects experience overspending and are a major reason why they ultimately fail? Underestimating cost of implementation from the start of the project could lead to project failure as businesses simply run out of budget. Traditional ERP implementation is a significant investment for large-scale corporations, but most companies do not account for unforeseen circumstances such as downtime, additional staff training, future support, maintenance, development and hardware fees.
Before any project is underway, be sure to outline each cost from start-to-finish with your supplier. Set a realistic budget based on the information provided, plan accordingly and be sure to consider any unforeseen costs.
Poorly Defined Goals
The vastness of what an ERP can offer can be overwhelming and you can quickly divert from the original requirements needed to meet your business goals when it comes to deciding your core modules. A lack of direction, however, can easily derail a project–too large a project and your ERP turns into a costly and complicated system, too little and you risk failing to meet your goals. An essential part to achieving a successful ERP implementation, therefore, is having a set of established and quantifiable goals before the project is underway.
To do this, a detailed roadmap is crucial. Goals must be clearly defined to ensure you and your supplier are on the same page. This will avoid any chance of miscommunication and allow the supplier to measure exactly what you need to ensure you’re left with an effective system that will meet your expectations.
Lack Of Testing
User testing should be carried out after the completion of each stage and then once more before the project goes live. Your partner should carry out testing through the entire system to identify any issues or corrections that need to be made to ensure that the system works.
When investing large amounts of capital into an ERP system, making sure it works the way it’s intended is vital to ensure the success of the project and to provide the business with a significant ROI. A thorough test should include functionality, integration, performance and security testing before being rolled out or phased into a business.