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5 reasons why ERP implementations fail

5 reasons why ERP implementations fail

Previously we discussed the many advantages of using an ERP system. However before you get to reap the benefits of the software, it needs to be successfully implemented. With one report suggesting that 21% of companies’ ERP projects had failed, it’s not always a straight forward task.

That’s why we’ve listed 5 reasons why ERP implementations fail so you can ensure that yours goes smoothly.

  1. Lack of a detailed plan

When undertaking a project of any size, planning is key to its success. To ensure that your plan works, you must ensure that it is:

  • Realistic: If you are setting goals which are unlikely to be met, then you are setting yourself up for a failure straight away. For example, saying that your ERP system can be implemented within a month.
  • Detailed and specific: Your plan needs to go into great detail about all of your requirements and what roles individual staff members will have in the implementation. It is good practice to list a logical series of tasks so you know that all the necessary groundwork has been completed.
  1. Lack of engagement with IT teams

According to a report by Software Advice, one anonymous IT professional said that management at his firm selected a new ERP system without consulting the IT team, giving them only one month to prepare for implementation!

As you can imagine this spelt disaster for their implementation process. It might sound obvious, but your IT team are critical in every stage of the process as they have the knowledge of your IT systems and know the important questions that your ERP vendor will need to answer before you can commit to a particular system.

BONUS CONTENT: Receive our 7 point ERP implementation best practices checklist via email.

  1. Neglecting to test the software

As most of you who have been involved in the implementation of ERP systems will know, it is very rare that the process will run smoothly. With deadlines being so tight, it is tempting to neglect to test appropriately to save time.

However in the long term this could cause your business a big headache. Not only will you not know whether the software has defects that need fixing, but more importantly you won’t know if it meets your business’ needs and produces the output that you require.

  1. Wrong choice of software

According to a report by ERP consultants Panorama, nearly a third of companies surveyed would not choose the same ERP vendor again in retrospect. To ensure this doesn’t happen, you need to make sure that you choose an ERP solution that is designed specifically for the distributive trades and has the functionality to support your businesses’ processes.

As mentioned above, involving all the key stakeholders in the decision making process is also crucial to avoid complications further down the line.

  1. Not investing in training

Once a system is in place, it is easy to think that the hard work is out of the way. However, one important step which is crucial to the implementation process is the training of staff.

Training usually takes one of two courses. Either the ERP vendor will train all staff on how to use the software, (which increases the cost of implementation,) or the vendor can train certain members of staff who then train the rest of the workforce. The advantage of the latter being that it is cheaper while also developing expert users who can guide the other users of the system.

Not putting enough time into this crucial step will mean that staff take longer to get used to the system in the initial period after launch.

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