Why ERP Implementations have Meagre Success Rate
Even after more than 40 years of evolution and advancement, the risks involved in an ERP implementation haven’t reduced significantly. Cases of failed ERP implementations keep surfacing every now and then and this is not just confined to small ERP Solutions. Even the big ticket ERP implementations being done by the top players have an unacceptable track record of failed implementations. This is one of the main reasons why organizations are still extremely apprehensive of coming under the ERP umbrella.
One of the primary reasons why many ERP implementations fail is the lack of understanding of the existing processes and an incorrect estimation of the requirement. Often organizations perceive an ERP System as an Enterprise Automation Magic Wand which will transform them into market leaders overnight and without any effort. To add to this, companies are blown away by the success stories ERP vendors recite which make everything look hunky dory about getting an ERP Software.
Most ERPs are designed and built to cater to companies which have processes implemented in a textbook fashion. There is a saying that a sword can’t accomplish what a needle can. But some ERP vendors try to accomplish exactly the same. They try to customize an ERP built for standard enterprises to fit into an organization with a completely different set of processes. The result is that instead of accelerating and streamlining processes, the ERP disrupts even the finest of processes already existing in the organization.
This is why companies considering an ERP deployment should seriously contemplate investing in pre-implementation studies conducted by third party ERP Specialists who can assess the need, feasibility and fitment of an ERP in a certain organization. We say third party here because how so ever ethical an ERP vendor may seem, they can never be unbiased enough to rule out the possibility of fitment of their software. Although these studies are not cheap but they can considerably reduce the chances of an entire ERP implementation going for a toss where far greater resources – financial and otherwise, are at stake.
Lastly, the user organization must accept the ERP system with an open mind. If the junior/middle level management of an enterprise is hell-bent on non-cooperating then an ERP Implementation cannot happen smoothly and is bound to suffer. These guys need to be motivated enough by the top management to shed their inertia and embrace change. On account of the above statements we can conclude that it is impossible to devise a fool proof recipe for a successful ERP implementation but the risks can be reduced with foresightedness and diligence from both the vendor and the end-user.