ERP Implementation Challenges & How To Overcome Them?
As a company focused on ERP software development and implementation, we observe, that manufacturing SMEs have become aware that they have to adopt new technology and mobility in order to stay relevant. They understand and recognize the value that ERP can bring to their business and are keen to implement ERP.
Yet, we observe that a good part of our preliminary discussions with our prospects focuses on their concerns and apprehensions about the ERP implementation challenges. Here, we are addressing these concerns through our blog.
Implementing an ERP is a big decision for any organization, as it impacts every aspect of the business. Moreover, there is a significant amount of time, effort and cost involved in ERP Implementation. Hence, it is quite natural, for companies to be concerned about what are the challenges in ERP implementation, and how to avoid them, for ensuring a successful ERP implementation
ERP Implementation Challenges
ERP Implementation starts with research to find an ERP that suits specific business requirements. Thereafter, it involves software installation, training end-users, moving data to new ERP system, mapping and configuring business processes.
Based on our decade long experience, as ERP Implementation partners of manufacturing SMEs, we feel it is our primary duty to educate the companies about Do’s and Dont’s while implementing ERP. We have realized that a lot of the problems or challenges can be averted by having a proper discussion, preparation, planning and ERP implementation strategy in place.
Let us first list out the challenges and then discuss how to overcome them.
Common ERP Implementation Challenges
- How to choose the Best ERP?
- Absence of Clear Business Objective for ERP Implementation
- Absence of Definition of Success of ERP
- Lack of Management Commitment, Support & Involvement
- Not setting clear expectations for upcoming changes
- Inadequate or Poor Training
- Inadequate Testing before Go Live
- No monitoring after Go Live
- No Post Implementation Support
Let us now discuss each of these in further details as well as the methods to overcome the challenges
Challenge: How to choose the right ERP?
There are many ERP providers. Who is the best? Whether to go for off the shelf or customization? This and more such queries arise when selecting an ERP.
Solution: Invite multiple ERP providers and select which most suits your needs.
First define your needs, challenges and future goals. Invite ERP software providers who have carried out successful implementation in your domain, so they will know unique requirements of your business. Have detailed discussions about their strategy, processes, and how they will help you meet your objectives with minimal customization required. Choosing the right ERP implementation partner is the first step towards a successful implementation
Challenge: Absence of Clear Business Objectives of ERP Implementation
Why do you want to implement ERP? What do you want to achieve? If you are not aware of this, then how will you judge whether you made the right decision or not?
Solution: Clearly Defining ERP Implementation Objectives
An organization must clearly define why they want to adopt ERP so that they can actually measure the before and after effects of implementing ERP. Some regular objectives of ERP implementation objectives are
- standardizing processes
- reducing manual work
- ensuring shorter cycle times
- reducing costs
- improving efficiency
Challenge: Absence of Definition of Success of ERP
If you do not define criteria for short term and long term success of ERP implementation, how will you be able to judge the value of the implementation efforts?
Solution: Clearly Define Success parameters and how they will be measured
Some examples of Short term success definition are:
- Key business areas transactions should be conducted via ERP
- Complete & Accurate reports should be generated from ERP
- Business discipline SOP should be implemented via ERP
Some examples of Long term success definition are:
- Purchase Order Cycle Time Reduced by XX days
- Reduce Operating Cost by X%
- Reduce Inventory Level by X%
Challenge: Lack of Management Commitment, Support & Involvement
If the management decides to go ahead with ERP, but does not provide the necessary priority, importance and value to the ERP implementation, it does not allocate enough time and resources, the teams will not take the project seriously and it will be a futile effort.
Solution: Ensure 100% Management backing
Management should consciously drive, encourage, actively participate to ensure successful implementation. ERP project team should be allocated proper budget, resources and time required for each implementation activity, as well as completion of all activities on time.
Challenge: Not setting clear expectations for upcoming changes
ERP Implementation Impacts every area of business including employees and customers, vendors as well as how they perform their tasks. If you do not inform and educate them about the upcoming changes, there is bound to be resistance and apprehensions from their end.
Solution: Setting Up Change management
Educate everyone concerned about the way data will be collected in ERP, how reports can be seen, how it will help improve processes and so on. This will help to remove any fears and get their active participation to ensure a smooth transition.
Challenge: Inadequate or Poor Training
ERP Training is crucial for success. If you have world-class ERP software but your users are not well trained on how to use it efficiently, it will be a worthless effort.
Solution: Ensure proper training and active participation of users to learn ERP Software.
Management and Employees should not only take the training religiously but also actively practice and get a thorough understanding so that they can effortlessly carry out regular activities using ERP software after Go Live.
Challenge: Inadequate Testing before Go Live
If you do not carry out extensive testing of the functionality of the software before Go Live, it may show up problems after Go Live and these will prove to be costly mistakes.
Solution: Through Testing before Go-Live
Carry out exhaustive to ensure ERP is able to complete all your business needs. Go LIVE only when all important parameters are met during cycle run, trial run, and users approvals are obtained
Challenge: No monitoring after Go Live
If Employees are not serious enough or do not enter accurate and appropriate data in the ERP system, the whole effort will be of no value. It will be a case of Garbage in Garbage out.
Solution: Frequent data analysis and monitoring after Go – Live
Management should demand and extract reports for review and analysis through ERP. This will stress upon regular use of ERP as well as emphasize that employees must enter all relevant data into the appropriate modules and the data is updated and accurate.
Challenge: No Post Implementation Support
Merely implementing ERP is not enough. With the change in a business environment, needs and regulations, ERP requires frequent reviews and corrections. If you do not include vendor for post-implementation support this will not be possible.
Solution: Post Implementation support
You should give a thought for post-implementation support activities while planning ERP implementation itself. Hence, it will be advisable, to choose an ERP vendor who is willing to provide post-implementation support. Only then, you will be able to maximize the value and return on investment of your ERP.
This article is compiled based on our decade long experience in ERP implementation. Rest assured that all the challenges can be overcome by having a good discussion, planning, preparation of each and every detail and having a good ERP implementation methodology and strategy in place. In fact, all this preparation will ensure a smooth and successful ERP implementation