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blog | July 08, 2014

Four Common Reasons for ERP Failure

The worst case scenario for an ERP (Enterprise Resource Planning) software customer is a failed implementation. Sadly, about 60% of all ERP implementations historically have ended this way. Most...

By WorkWiseSoftware

The worst case scenario for an ERP (Enterprise Resource Planning) software customer is a failed implementation. Sadly, about 60% of all ERP implementations historically have ended this way. Most often, failure implies a stoppage of production and/or orders, running significantly over budget, drastically changing the go-live date, or not making the desired return on investment.

There are many reasons why these failures happen, but let’s take a look at the top four.

    1. Sacrificing business results for speed and cost of implementation…poor ERP selection. While there is always a lot of focus on the cost and speed of ERP implementation, these two factors should not be more important than the functionality of the system within your company. How the system works with your company’s practices and processes will ultimately be key for long term success.
    2. Lack of executive involvement. Management needs to be heavily involved with each step of the implementation. This helps them stay in touch with important events/updates, understand the technical aspects and scope of work, and realize the amount of time and resources needed for the process. Ultimately, management is the key to getting all other employees on board since they are likely the ones who decided to purchase the ERP software in the first place.
    3. Unrealistic expectations. ERP vendors often say that their ERP solution can be implemented quickly and at a low cost (relatively speaking), but statistics show otherwise. For example, the average implementation takes 14 months for a small-mid-sized company, but vendors regularly say they can complete it within 6, for example. With these unrealistic time estimates, the delay also brings in extra costs, resources, and a rushed implementation.
    4. Training on the new system. Having the right system in place is key, but it is ultimately useless without ensuring users are knowledgeable enough to use it. Rely on the ERP vendor’s training options to help ease the process whether it be by training all of your employees or by training a few of your employees and then having them train the rest.

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