Key Takeaways From An ERP System Failure To Avoid Future Hassles

ERP system

There is no denying the fact that an ERP system assists companies to manage every department and their business processes within just a few clicks. ERP systems’ demand is continuing to rise because of the innumerable benefits it offers to every type of business.

ERP software provides the most powerful methods to solve your business’ problems. It helps to make back-office operations run smoothly.

Moreover, you need to have patience during an ERP software system implementation as it might take longer than you expected. With this, a lot of resources are used to make its deployment successful. An analysis shows that approx 75 percent of ERP implementations fail. There are many fallacies about ERP system that have led businesses to go in the wrong direction. Consequences of the same have to lead to costly blunders and destructions of companies.

Here are a few of popular examples when ERP implementation failed very badly

1. Nike experienced a loss of $100 million in sales which resulted from failed its supply chain project.

2. Due to an unsuccessful ERP implementation, 27,000 University of Massachusetts students were not able to register for classes and collect financial aid checks back in 2004.

However, these ERP system failures can be evaded by having some useful tips that help to make ERP implementation a success.

Lesson 1: ERP projects might have longer implementation period than expected.

An ERP deployment is not a task of just a few weeks. It takes from months to years for successful implementation. Majority of the firms end up waiting longer than expected time for their ERP project implementation. It’s because many companies are not prepared for being flexible with the project timeline. If you are one of those organizations that want to just start working keeping deadlines in mind, you need to change this motive. The implementation of an ERP system may require additional time. To properly maintain an ERP for moving forward, you should not underestimate the time that spent on it. ERP system is a not a one-time investment. It involves upgrading, supporting and maintaining an ERP system on time when the business grows.

Lesson 2: Understand what you really want from it

ERP solutions are designed for back-end management operations of a company. However, they do not serve to address every business challenge.
So, it’s important for you to figure out challenges you are facing in your firm beforehand. Ensure that the ERP you are going to choose should be able to solve your problem and meet your requirements. The reason behind this is every ERP system has certain features and functionalities. Business functions like sending an invoice, and collecting a payment can be done by integrating third-party solutions to an existing ERP system.

Lesson 3: Be prepared for unexpected ERP’s costs

An ERP software is an essential tool for your company in the modern business world, but it also has an extended cost associated with it. An ERP implementation takes in a lot of time, resources, and employees. Moreover, it comes with an additional cost related to tasks such as licensing, development, maintenance, and hardware costs. Never underestimate the costs involved with an ERP deployment because it can be damaging to your business. 74 percent of ERP projects undergo costs overruns in 2016. So, the key steps to follow in this case is proper evaluation and right planning. Also, never neglect the small expenses which are associated with training the staff, data conversion and bug fixing.

Lastly, ERP software comes with some complexities and pain points, but making strategic plans will ensure a successful ERP implementation.

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