Business software implementations are notoriously prone to failures, particularly Enterprise Resource Planning (ERP) systems.
Many studies over the years indicate that 20-30% of such projects fail outright, while up to 70% fail to deliver the promised value within the time expected. While nobody sets out to fail, perhaps you may recognize some of these warning signs (and many others) in projects you have experienced. Here are five ways to fail at ERP:
1. Pick software your buddy recommends and start with a demo
Requirements are hard. Everyone wants a quick, easy solution. This software promises to work seamlessly for our industry. And the vendor’s sales team showed us a cool dashboard. We’re excited!
2. Decide quickly and load up on modules to take advantage of that “month-end discount”
Yes, ERP is expensive, but we drove a hard bargain and purchased five additional modules to get a 20% discount! Of course, the software subscription and 20% annual maintenance fee timeline starts as soon as the ink is dry on the contract, and implementation hasn’t started yet, but we’re confident the team will get it all up and running quickly!
3. Trust that the ERP vendor or reseller will take care of all your implementation needs
Uh oh – the first signs of trouble arrive. Poof! The sales team just vanished. Now, the vendor implementation team is hearing about our requirements for the first time, and they say we may need a few “change requests” that may affect the original project budget. The ERP project manager says the plan we bought only covers limited software configuration and training of our SMEs (I think that means Subject Matter Experts – we’ll have to find some of those).
4. Underestimate Project Management and Change Management
Now our ERP project is turning into a real slog. We found our SMEs and they are taking on the project “in their spare time”. They are also saying the software doesn’t meet all our needs. We’ll have to change many of our business processes or pay for more change requests. We don’t know what to prioritize. We’re not sure what impact this system will have on our people and our operation. We’ve missed several milestone dates, but we’re pressing forward.
5. Don’t worry – you can work out the kinks after “Go Live”
User Acceptance Testing (UAT) didn’t go very well, but since we were already months behind schedule and burning cash the CEO put her foot down and said, “Just get it done!”. So, we slammed it in. We’re only using a fraction of the functionality we purchased. Productivity is down. There is no dashboard and we have no hope of using the extra modules. No one can remember why we bought this software and it will take months to get back where we were before this all started.
If you’ve gone through an ERP implementation you may have experienced some or all this pain, but it doesn’t have to be this way! When done right, an ERP system is a lever of profitability that provides greater visibility, smooths information flow, and allows a company to productively scale operations. We’ve been there – we can help.
Marc Hallquist is Practice Director for Virtual Information Executives (VIE). Marc serves as an interim CIO, strategic advisor, CIO instructor, and management coach. He brings a proven approach to leverage IT in a way that enables efficiency while fostering innovation.
Prior to VIE, Marc served as CIO at Columbia Distributing. His career of over 25 years includes both management consulting and operational roles at Strategic Solutions NW, Willamette Industries, and Accenture.
When not working with clients Marc loves to get outdoors and spend time with his family skiing, hiking and biking.