Search This Blog

Saturday, December 26, 2009

Implementing ERP: The 5 Mistakes to avoid

I have written about Digital Marketing earlier. 

The five main mistakes quoted below are genuine as i have experienced it during my course with the ERP implementation for a prestigious client. I would say we had tough times due to the resistance from the usergroup and the ignorance from the client, which eventually didn't help them to understand the full potential of the worldclass ERP package.

What are those mistakes ?

a) Choose a costly Partner than a cost effective vendor One must thoroughly assess all of options in evaluating potential external implementation companies. Software companies aren't always the best at implementing their own software, and some are more expensive than others. An organization should look at a vendor who can partner with them in their ERP initiatives not only for software implementation but also in managing the non-technical aspects of the project, such as organizational change management, training, and ERP benefits realization. 

 b) Map the software to Business requirements don’t just buy it If an organization has decided that ERP is the route it needs to take, it is important to begin by looking at the desired software to implement. In most of the cases, package selection is influenced by top executives who have previously worked on particular package. Instead, executives should define and document key business requirements irrespective of the package that may be selected. This includes not only nice-to-haves, but also requirements that can be "proposal-breakers" if the software is unable to accommodate. The package selected should focus on achieving measurable business value for the organization, and one should choose the software that best enables to do this c) Focus less on System training and more on Change management / Executive sponsorship What is your Business Case and ROI? This is where many companies fall apart. Answering and documenting this question is important to get Executive sponsorship and ownership for an ERP program. The lack of a change management approach as part of the program can prevent a program from succeeding. Resistance to change is human nature and is quite often caused by 

(1) A failure to convince a case for change, 

(2) Lack of involvement by those responsible for working with changed processes 

(3) Inadequate / Improper communication 

(4) Lack of visible top management support and commitment, and 

(5) Arrogance. 

A lack of buy-in often results from not getting end-users involved in the project from the very start, thereby negating their ownership of the new system and processes. ERP-related training is also crucial as most employees must learn new software integration and business processes which affect the operation of the entire organization. Appropriate focus should also be given on this part of the ERP implementation else it leads to much pain and suffering downstream. 

 d) Don’t just Save Dollars sometimes? One of the key causes of ERP implementation failure is unnecessary cost cutting. In an effort to avoid multi phased roll out costs, repetitive conversion costs, some companies take a very risky route and go live “Big-bang” at multi-plant sites simultaneously, subjecting all plants or some plants to a total shutdown, should there be a failure Some projects have compressed schedules in order to save on expenses, only to eventually overrun both schedule and budget. Sometimes the question “What is my Value for Money / ROI?” should take a back seat as some projects should be treated as an upgrade to the company infrastructure that is necessary to maintain or gain a strategic and competitive advantage.

e) Yes we can but are we prepared for Failure? Best organizations would prepare themselves for unforeseen contingencies, similarly all implementation projects should have a fail over plan. No matter how well-run a project is, one should be prepared for failure. If the project failed or if the software was not implemented correctly, what will be the backup plan? Would users be able to access legacy systems? Would certain processes be performed manually until the system is brought up? Catastrophic failures may not be common, but they do happen on occasions, so companies should be prepared for the "what-ifs." 

1 comment:

  1. Great Article..It was very informative..I need more details from your side..include some tips..I am working in Erp Development Company In India