How To Avoid Common Pitfalls During An ERP Implementation?
So often it is seen that businesses simply rush through an ERP implementation, only to be confronted with a number of pitfalls along the way.
Following are some dos and don’ts to help you avoid these pitfalls during an ERP implementation.
Put your heads together and understand your specific requirements
The first thing that needs to be understood is that there is no one-size-fits-all ERP solution. You must have utmost clarity regarding what goals you want to achieve from an ERP software. There should be a roadmap in place and all your requirements must be properly documented, otherwise you may end up getting a system which is unfit for your business. An ERP will have a large list of features it offers. You don’t have to necessarily use all of them. Pick up features relevant to you and which you feel can be used by your organization. e.g. Do not start using “Business Scorecards” if your organization is not ready for it. Many organizations fail to adopt Business Scorecards easily. So ask for what you can absorb or at the end of the implementation you will end up building a tall 50 storey building and then end up breaking 30 floors (and incurring costs) because really speaking you only needed 20.
Customizations – To do or not to do
If you have chosen the right ERP System, it would cover most of the standard requirements of your business. With some tweaking of your processes/reports you should normally be able to implement the ERP as standard. However if there are some business critical requirements which cannot be handled without Customization, only then should you look at the path of Customization. However please evaluate it very carefully if the Customization is “really” Business Critical or is just being projected as “Business Critical” by a stubborn user. The less Customizations you do, the faster the implementation and better the benefits. As a simple thumb rule, avoid heavy customizations and non-business critical customizations for sure.
Set your eyes on the added benefits also and not just the financial benefits
Try and not worry too much about initial expenses vs value derived in the nascent stages of ERP implementation. It will take some time before the organization gains momentum and starts getting real value from the ERP System. Cost worries during the nascent stage of implementation may end up you missing out on the added value of the software, more often than not. Look at all those factors that are beyond financial numbers, whether it is the improved synergy among different departments which helps an organization take those crucial decisions, or the social collaboration through which it engages with its customers and respond to their queries “correctly” and in a “quick” manner. Give them considerable weightage when an ERP Software benefits are being evaluated. The speed of availability of the “right” information and the resultant quick decision making has immeasurable but large benefits. Imagine if you could respond to a customer in just 1 minute about the possible delivery dates of an Order vs a situation where it takes you 2-3 days to respond to the same query. Imagine the impact of the increase in business volume you will have with your customers if you could respond to such queries in a jiffy.
Set realistic expectations and allocate the “right” resources
It is a common pitfall that organizations tend to allocate the least occupied resource within Departments to the ERP implementation process. Little do they realize that this will do an irreparable damage to the ERP implementation in the individual department as well as to the entire organization. One must try and identify Senior/Middle Management for ERP implementation process who are the people who not only understand their own Department’s processes well but are also aware as to how do their processes interact with the processes of other departments. Such people will always have “more critical” business priorities but then they will have to find out time for the implementation project anyway.
Secondly, it is also important to manage the expectations of the users. In an attempt to automate “everything” one should not end up making the processes so complex and time taking that people are not able to use it. Also in an attempt to automate everything, there is a danger of getting into the “heavy customizations” pitfall which is best to be avoided.
Choosing the Right Champion
It is important to identify the Right “Champion” within the organization who is going to drive the ERP implementation project. By default, in most companies the IT Manager or the CIO becomes the ERP Champion. Do not fall into the trap of making the IT Manager your Champion for ERP implementation. While they may also be good choices but look at the ERP as a Business Initiative and not as an IT initiative. Once you look at ERP as a Business Initiative, you will have a far wider choice of choosing the Right ERP Champion within your organization.
Don’t compromise when it comes to training your personnel
If your employees are not in tune with the nitty-gritties of the new ERP system, then an ERP implementation is bound to fail in most cases. Not only will this lead to a failure or near failure of an ERP implementation, but it will also lead to an organisation having under-performing and resentful employees, spelling doom for its productivity. To avoid such a scenario, give the requisite impetus to the training of your employees before the new ERP system goes live.
Get rid of all the legacy applications and stop “loving” your legacy application
The objective of implementing an ERP System is to streamline the workflows and minimize costs which can be realized only if the new ERP doesn’t bear the burden of the legacy applications. Before implementing a new ERP software, you should make all efforts to decommission the legacy applications as early as possible. Secondly do not fall into the trap of seeking from your ERP what your legacy situation used to offer. You will otherwise end up configuring and customizing your ERP as your legacy system resulting in no benefits whatsoever. Some processes will become longer and some will become shorter. Be prepared for changing your existing processes while implementing your ERP.
If you follow these basic set of rules it will help you overcome pitfalls and will help you with a set of satisfied users and a truly well implemented ERP which ultimately will help you build an organization with vastly improved organizational efficiencies.