Enterprise Resource Planning (ERP) solutions help businesses to automate their operational processes, optimize time and resources, and increase their bottom line. But implementing ERP in your organization requires careful planning long before system onboarding. This is where businesses often make costly mistakes.
Let’s take a look at some of the most common ERP implementation mistakes that businesses make so that you (and your organization) can potentially avoid them.
Common mistakes before ERP implementation
- Not conducting a needs assessment
Many companies all too hastily implement ERP based on advice they’ve received, or as a reaction to industry trends. Before you dive in, its’ imperative to conduct a thorough needs assessment to identify key bottlenecks in the organizational workflow and define your company’s actual requirements. A needs assessment also helps businesses to purchase only the ERP modules they need.
- Not cleaning and structuring data
Before implementing ERP, businesses often have a collection of software tools for different business processes. Each tool generates data in its own format, with a very high chance of duplicate and redundant entries as well. Many businesses fail to clean, structure, and optimize their existing data before transferring (migrating) it to the new ERP system. This can result in even more data redundancy and duplications which can potentially take up valuable time and resources to correct.
- Not choosing the vendor carefully
Businesses choose their vendors based on criteria, such as product reviews, system features, and functionality, or costs. But this may not always lead to selecting the right ERP product, and the ‘best fit’ for your business. Choose an ERP vendor who truly understands your industry sector, and your unique business requirements, with strong reference customers, and a reputation for pre-and post-sales customer support.
- Not consulting your vendor.
Some businesses don’t place enough emphasis on the consulting process, where your ERP vendor will not only answer all of your questions and concerns but proactively provide you with all the information you need, to make better-informed business decisions along the way. Reputable vendors understand their products well and can help you choose the best-suited ERP modules to manage and control your business.
Common mistakes during ERP implementation
- Ignoring process analysis
Some customers fail to perform a thorough business process analysis to understand where they stand in terms of operational efficiency, and technological deficits. This results in not properly defining targets from the get-go, and can potentially lead to ERP implementation failure. A simple SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of your actual business processes is often sufficient to make informed decisions during ERP implementation.
- Disregarding Key Performance Indicators (KPIs)
Many businesses do not identify the most important KPIs during implementation. Even if they do, they forget to measure and track them post-implementation. KPIs help businesses to measure the success of their ERP, and track quantifiable changes that have taken place since its implementation. Important KPIs include inventory turnover, customer satisfaction, reduced IT expenditure, ROI, and revenue growth.
- Not choosing the right service delivery model
ERP is delivered as either on-premise, cloud-based or as a hybrid model that combines on-premise solutions with cloud-delivered modules. A frequent mistake that businesses make is to choose whatever seems most accessible to them. As each business is different, it’s critical that you perform a thorough evaluation of your business processes at the start of the project, and not during the implementation stage.
- Lack of product knowledge
ERP suites often have innumerable features even in their most basic packages. Most new users feel overwhelmed by the immense number of modules and functionality, and as a result, simply don’t use them. It’s important to not only understand what features are available, but to educate your employees on how to best use the system, and optimize the user experience. Your ERP vendor will (and should!) provide employee training, documentation, and online support tools to enable users to master the system and work independently.
Common mistakes after ERP implementation
- Not preparing for changes
As technology changes a rapid pace, future ERP software updates may not be compatible with your existing hardware. To avoid this, businesses should consistently monitor their hardware infrastructure, and upgrade as and when necessary.
- Not testing the product
Once your ERP is up and running, it’s critical to test the new system for several weeks or even months to determine and mitigate any gaps or hurdles, and immediately report these glitches to your vendor. As many users don’t test out all of the features, they discover issues much later on.
- Not training employees
Overlooking the importance of staff training during and after implementation of ERP is a mistake that many businesses make. It results in reduced productivity and efficiency, and increases the chances of going back to old habits. As ERP implementation brings an unprecedented number of changes to business operations, employee training is a must.
- Not getting back to vendors with questions
ERP is a large and complex software program that requires considerable effort to learn and use. It’s only natural for customers to have questions after its implementation. However, many companies choose not to approach their vendors with their queries. Some try and figure things out on their own, while others simply carry on, despite their difficulties. Your vendor is there to help you get the very best out of your ERP, and optimize system functionality, including what works, and especially, what doesn’t.
Avoid common ERP implementation mistakes
ERP helps businesses of any size or scope to manage and control their operational processes in accordance with industry standards. Successful ERP implementation leads to an enhanced customer experience, increased sales, streamlined manufacturing processes, and overall savings in time, resources, and costs. Many businesses make mistakes before, during, and after ERP implementation that results in reduced efficiency and productivity. Avoiding these common mistakes can (and will!) improve ERP implementation success rates, and in turn, help you achieve your goals, and ultimately, grow your business.
To learn more about onboarding an ERP system in your organization, contact us for a no-obligation call with one of our ERP implementation experts.
You might also like to read The 6 Best Practice Highlights for Preparing for An ERP Implementation Project