For many decision-makers, a new tool or piece of software is the answer to all of their problems —once they’ve signed on the dotted line, they expect instant results. And of course, if you’ve made the right purchasing decisions, this should be largely true. However, before you can reap the benefits of your new solution, you’ll need to ensure it has been implemented correctly.
If the cost of your initial investment is high, it’s very tempting to cut costs and corners by scrimping when it comes to installation, roll-out and staff training. However, what many don’t understand is that while selecting the right product is crucially important, it can only deliver the promised benefits with the correct implementation. Otherwise, it’s like fitting bicycle tyres to a supercar.
You would assume that it would be predominantly smaller businesses that would fall into this trap. However, high-value, multi-national companies have also suffered as a result. Take Under Armour for example; they’re an American manufacturer of sportswear with a $4.4 billion brand value in 2017, as provided by Statista.
Despite the company’s high worth and global dominance, Under Armour recently hit the headlines in Q3 2017, reporting a 4.5% dip in sales. The reason? A troublesome ERP software upgrade that impacted the company’s supply chain.
Speaking of the issue, Patrik Frisk, Under Armour’s President and CEO, said: "During this system migration, we have encountered a number of change management issues impacting our workforce and manufacturing partners as they adapt to the new platform and processes."
Adding further comment was Chief Financial Officer David Bergman, who said: "So, we expect that in Q4, we won’t have the same level of impact that we had in Q3, but [the issues] won’t be completely gone yet. We’ll continue to work through it, and they continue to fine tune as we move into 2018."
The scale of Under Armour’s ERP system upgrade was sizeable, yet its downfall was that the brand simply didn’t allow for enough time or training for staff to learn the new system. What this highlights is just how common these ERP implementation errors are.
In this blog post, I will discuss the most prominent ERP implementation errors and how you can devise an implementation plan to overcome them.
As you’ll already know from the above Under Armour example, improperly accounting for staff training in your initial implementation plan can lead to huge issues. We can’t underestimate the importance of ensuring your employees are fully up-to-date with how to use your chosen ERP system.
Hopefully, you should have chosen a system that is easy-to-use — that’s half the battle! The next step is simply communicating how the ERP software should be used in relation to each of your processes. You may not want to spare the resources, time or budget now, but doing so means you can benefit from your system sooner — saving you in the long run.
You may have a blinkered view of how your ERP system will benefit you. For example, you may believe that the main advantage your system will bring is streamlining the supply chain, paying less attention to the benefits it can have on order processing, asset management, traceability and so on.
This is the challenge you’re facing — which internal processes or systems do you integrate with your ERP system? Taking a blinkered approach will likely be problematic as you realise a few months down the line that you’re not getting the most out of your system and face another transition period.
Make sure you’re fully aware of all of the benefits your chosen system can bring and categorise them into essentials and nice-to-haves. Doing so will allow you to compile a realistic view of the value and associated cost of implementing each.
You’ve finally found the perfect ERP solution, invested in staff training and now you’re ready to start using it. A few days in, you realise that your pre-existing IT infrastructure is unsuitable, resulting in ERP software that lazily operates.
Underestimating the servers, required technology, internet speeds and bandwidth is easy to do. However, doing so can lead to a substandard implementation which will ultimately delay employees and reduce efficiencies, rather than improving them.
This may seem obvious but all too often, manufacturers fail to budget realistically. The cost of the software itself is one factor, but what about the associated implementation costs? Make sure you effectively budget for each stage of the system’s implementation, including the associated cost of staff training, to ensure there are no nasty surprises once your project is underway.
With the promised benefits of an ERP system, it’s very easy to jump in with both feet and fail to correctly prepare for its implementation. However, by choosing an ERP software provider like Kerridge Commercial Systems, we can help you choose and roll-out the most suitable solution for you. This allows you to quickly benefit from your choice and overcome any ERP implementation challenges.