4 Challenges of ERP Implementation (And How to Ultimately Win)

{authorName}

Finance Insights for ProfessionalsThe latest thought leadership for Finance pros

Thursday, January 30, 2020

ERP systems are excellent at improving productivity and boosting profit, but implementing them can be difficult. Here’s how your business can tackle common challenges.

Article 3 Minutes
4 Challenges of ERP Implementation (And How to Ultimately Win)

Enterprise resource planning (ERP) has exploded in recent years, to the point where it has become an inescapable facet of life for many businesses. It’s widely acknowledged as a more efficient way to work, which in turn leads to improved productivity and boosted profit. However, these are all long-term benefits; in the short term, ERP systems can be tricky to get off the ground.

The most difficult aspect of any ERP project is the implementation. Organizations regularly run into scope creep, delays and budgetary issues that lead to deployments taking longer and costing more than was originally intended. Here are some of the typical challenges companies face, and how you can bypass them.

1. Service disruption

Implementing any kind of system is bound to cause some issues, and around two-thirds of businesses experience some kind of operational disruption while deploying an ERP solution. This can be a serious problem given the length of most implementation periods, which has increased to an average of 17.4 months.

The best way to tackle this issue is to shorten the implementation period, as disruptions are inevitable and have to be dealt with as they arise. The main cause of ERP deployment overruns is organizational issues, so before you start implementation you need to make sure every level of your business is aware of what’s coming and put processes in place to make it go as smoothly as possible.

2. The project going over-budget

Budgetary issues are likely to come with every major project, but they seem to be more of a problem for ERP implementation. Deployments can easily end up costing three or four times as much as was planned, and in 65% of cases the cause of this is the same: aspects of the system need to be changed midway through implementation, which leads to scope creep.

Of course, this can be prevented with solid pre-implementation planning. ERP experts Velosio recommend starting the process with a pre-sales discovery, and advise limiting additions as much as possible once deployment has begun. If you can stick as closely as possible to the ERP system you originally requested, the project should stay close to its original budget.

3. Testing before day one

The first day of an ERP project is bound to be nerve-wracking. As much as you might know that it will take much longer to fully implement, day one is still crucial. However, just because it’s the first day of use doesn’t mean it should be the first time you test the system out.

A survey of manufacturers and distributors found that when ERP projects fail, the number one reason - cited by 31% of participants - is inadequate quality of testing. Checks to make sure everything is operational and working as expected should be completed before you even think about unveiling the solution.

4. Changing your organization’s culture

One of the main issues that can typically come from deploying an ERP project is that your company culture causes friction. The top difficulty that ERP project teams face is organizational change and the ‘people’ part of the transformation, not anything to do with the actual product being implemented.

This can be dealt with in a number of ways, but the best solution is to tailor the ERP solution as much as possible to your teams’ specific concerns. That way, you can clearly show each individual how the new system benefits them specifically, rather than relying on how it will help improve the business as a whole; something that can feel nebulous and hard to care about at times.

Access the latest business knowledge in Finance

Get Access

Finance Insights for Professionals

The latest thought leadership for Finance pros

Insights for Professionals provide free access to the latest thought leadership from global brands. We deliver subscriber value by creating and gathering specialist content for senior professionals.

Comments

Join the conversation...