7 reasons in ERP implementation failure (Part 2)
Reason 4: Taking a kitchen sink approach
One of the most common mistakes made in implementing ERP is to assume that it will be able to run all your processes from end-to-end. Over expectation of what a software can do often leads to disappointment. Companies need to start with a realistic expectation first before embarking on selecting an ERP Software. While ERP can automate much of your business, you will still not be able to reach the 100% mark of computerisation. If you can computerise up to 80% of your processes, up from 40% currently, you will already be achieving 100% improvement in your processes.
How to overcome this potential failure? Focus on using the ERP to improve value chain and gain visibility over your operation by cost monitoring; anything more than that is a secondary goal. Start with the right benchmark and realistic expectation. Look for a vendor who shares your objective and who is willing to provide honest advise on certain aspects of your implementation. Remember the vendor is suppose to be providing you advise, not a “yes man” and agreeing to all you want to do. Some requirements need additional manpower resources to implement and you might not have that additional resource at the moment. An experienced vendor will know if something you have in mind is workable or is too idealistic.
For example, many companies talk about barcoding, thinking that it can help to reduce their work load. They imagine the queues forming at the departmental store and how fast it takes to checkout at the counter by simply scanning on the barcodes. So they imagine that barcoding will also speed up their order processing. Never did they realise the gigantic amount of work involved in consolidating, product ID mapping, generating, printing and sticking the barcode labels on the items before they were actually placed on the shelves. Some questions to consider are do you have the resources to take care of this initial aspect of the work? Are your products similar to those found in supermarkets? Do your products already have barcode labels? How fast are your product turnaround time? These are some questions to ask before thinking of implementing a barcoding system.
Wrong expectations also come in the form of wanting to change software just because “it is time to change”. Rather than focusing on changing the entire system, first take a look at what are the problems you are currently facing and see if it can be solved without changing the software. Sometimes, it could be a process change or a human resource change. If these changes have been implemented but without much success, then consider a simple tune-up of your current system or a small add-on or customisation to improve the work process. All these can be implemented at a fraction of the cost. Sometimes, reimplementation of the same software can cost much less than switching to another ERP software vendor. Unless you are a first time adopter of ERP software, you do have a choice in just staying with your current provider.
Reason 5: Focusing just on new and nice features
Being sold into new features does not necessarily translate to improving the business process. Some new features can be helpful to the company, while others can be a pain to implement or totally unusable. Just be careful that these new features are not just marketing gimmicks to attract a buyer into buying the product. New features will become old features after a few months, but product user-friendliness, stability, reliability and vendor support will all be long term benefits for the company. It was laughable when a condominium was launched sporting a cycling theme park to attract cycling enthusiast. This “new feature” is a hype to entice cycling enthusiast, but if we think long term, is the reason for staying in a condominium because of a cycling theme park? Hardly. In like manner, is the reason for using an ERP system because of the “new features” or because it can add value to the company’s business? The latter will be a good reason to consider if the new features are really a must have feature of the ERP or just a nice to have feature.
How to overcome this potential failure? Spend more time exploring the user-friendliness, functionality and reliability of the system rather than being bought into by new or nice features. Ask for references for company’s who are in a similar business, speak to them about the features, challenges and get a gauge of what you will be getting. If the vendor is not able to provide or reluctant to provide at least 3 companies who are using the system, it is time you look for another vendor.
Continue Reading…7 reasons in ERP implementation failure – Part 3