ERP LOSERS

A FAILED ERP IMPLEMENTATION IS OFTEN TREATED AS A SOFTWARE PROJECT 

“There are four purposes of improvement: easier, better, faster, and cheaper. These four goals appear in the order of priority.”  - Shigeo Shingo 

 

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In the ever-evolving landscape of ERP implementations, it has become evident that treating ERP merely as a software implementation project can lead to stunning failures. The consequences of such failures are profound, as they can result in a lack of anticipated benefits, exacerbation of existing issues, or even a stagnant reliance on outdated systems that hinder true business progress. 

 

To truly grasp the essence of why ERP implementations, fail when treated solely as software projects, one must delve deeper into the core reasons behind these missteps. It is not solely the fault of the ERP system itself or the chosen software; instead, it is a collective failure to recognize the holistic nature of an ERP implementation. 

 

An ERP implementation transcends the boundaries of software; it encompasses the very essence of an organization's operations, processes, and people. To treat it as a mere software project overlooks the crucial interplay between technology, business strategy, and organizational culture. 

 

The failure to acknowledge this interplay often leads to a narrow focus on technical aspects, such as system configuration, data migration, and software customization. While these elements are undeniably important, they are just parts of a larger puzzle. 

 

Successful ERP implementations require a broader perspective, one that takes into account the unique needs, goals, and challenges of the organization. It demands a deep understanding of business processes, effective change management, and extensive stakeholder engagement. 

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1. Little or no top management education: We are talking business transformation and changing the people think about operational excellence not ERP or software training. Top management need to understand what they are heading for, what it means to the company, what is involved, how long it will take, the costs and how to measure success.  

2. Confuse education with training: Education is what and why (gives you the understanding) and training is how to do it.  

3. Making this an IT led project. Strange as it may seem, this is not an IT project: It is a business transformation project, in which hardware and software will play a vital role. However, to ensure success, the very top management of the company must take the lead.  

4. Lack of executive, leadership, sponsorship, and active involvement: ERP implementation requires strong executive support and sponsorship. Without executive leadership and guidance, the project may lack direction, resources, and accountability.  

5. Poor planning and preparation: Inadequate planning and preparation will lead to ERP failure. A poorly planned project lacks clear objectives, measures, timelines, and resources, making it impossible to achieve the desired outcomes.  

6. Data accuracy measures everything: Before any ERP package is chosen, the data in the current systems must be maintained to at least a level of 98% or higher accuracy.  

7. Insufficient training and user adoption: Inadequate training and low user adoption will lead to ERP failure. End-users must be able to use the system effectively to understand why it is important to efficiently achieve the intended benefits.  

8. Resistance to change: Resistance to change is a significant barrier to a successful ERP implementation. Constant education and training is required so user understand why they must change,  

9. Results must be visible: Honest communication is essential: successes and failures need to be known. Improve success using problem solving techniques fix failures.  

10. Inadequate data management: Poor data management can undermine the success of ERP implementation. The system must maintain accurate, timely, and reliable data to support business decision-making.  

11. Integration issues: Integration issues arise when ERP systems are merged/interfaced with other systems within the organization. Integration issues can cause all sorts of data inconsistencies, process inefficiencies.  

12. Inadequate implementation support: Inadequate regular implementation support will lead to ERP failure. The system must be supported and maintained to ensure continuous improvement.  

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In Summary:

15 steps to guarantee ERP implementation failure: 

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1. Top management is not educated in business transformation and the effort, time and cost involved to make it work. 

2. Confusing education with training. 

3. Allowing IT to lead the project. 

4. Choosing the wrong software vendor and/or package. 

5. Lack of executive leadership and sponsorship. 

6. Every employee needs to understand the plan 

7. Poor planning and preparation. 

8. Underestimating the time, budget and effort required 

9. Data accuracy is not maintained. 

10. Insufficient training and low user adoption, 

11. Resistance to change. Still using spreadsheets and existing systems. 

12. Inadequate data management. 

13. No meaningful operational metrics 

14. Integration issues with other systems. 

15. Inadequate implementation support. 

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