An ERP implementation is not a simple, short or routine task. It’s a large undertaking that serves to transform your business – but comes with many risks along the way.
Companies often suffer the aftermath long after an implementation that didn’t go according to plan. Some common root causes for failed or incomplete implementations involve user adoption issues, lack of training or documentation, poor change management mechanisms, system functionality issues and data lacking integrity. If you experience any of these, it is crucial to work with your vendor. You may even request a “health check” from another party on the current state of the adoption of the software.
Negative Consequences
An incomplete ERP implementation can have several negative consequences for the organization, such as:
- Inefficiency: If the ERP system’s functionality isn’t being leveraged, the organization may continue to rely on manual processes, which can be inefficient, costly and time-consuming.
- Inaccurate Data: Incomplete implementation can lead to data inconsistencies and errors, which can affect decision-making. Manual processes allow for human errors that can create serious costs for your company.
- Reduced and Deferred Return on Investment: Deferred return on the initial investment can occur as the organization may not be able to leverage the full benefits of its ERP system. This can result in sunk costs attempting to patch the system and processes with band-aids that the ERP solution was meant to solve originally. When gauging the benchmark on company maturity levels, businesses with a partially-used ERP will find that they are still focused on either core maintenance or optimization efforts, instead of focusing on growth initiatives of their different capabilities and functions.
To best prepare for course-correcting an ERP implementation, a company must have business readiness. You must ensure you have the right resources, including skilled personnel and adequate funding, to support the implementation process. Having a well-defined timeline and milestones must be set in stone to ensure the implementation stays on track.
Steps to Correct a Failed ERP Implementation
To course-correct a failed ERP implementation to deliver intended operational results, an organization should take the following steps:
- Identify the Gaps Using an Assessment: The first step is to perform a health check of the people, process, technology and data to identify the gaps in what was expected versus delivered. This can be done through a thorough review of the ERP system and the business processes.
- Prioritize the Importance and Urgency of the Gaps: After identifying the gaps, the organization should prioritize the gaps in user adoption, training, data or functionalities based on their importance and impact on the business processes. Handling too many projects at once can slow down the process, so phasing is required.
- Develop a Plan: Once the gaps in user adoption, training, data or functionalities have been identified and prioritized, the company should develop a plan to phase in the identified solutions. This plan should include a timeline, budget and resource allocation.
- Allocate Resources: The organization should allocate the necessary resources, including personnel, budget and technology, to complete the implementation.
- Train Employees: To ensure a successful implementation, employees should be trained on how to use the new modules or functionalities. Training and documentation must be placed as high importance throughout the process to ensure success for the go-forward approach.
- Test and Refine: Testing should not be considered a backburner activity, but one which will be paramount in risk management. The organization should test the system and refine it as necessary to ensure that it meets the business requirements.
- Monitor and Evaluate: The organization should monitor the optimizations to ensure that it is functioning as expected and evaluate the results to measure the impact on the business processes.
Your implementation gaps can be turned around with an actionable plan, but it’s important to get a second opinion if your implementation has faced troubled waters. Having a dedicated team and a well-defined plan to ensure that the implementation reaches its goals for the organization is essential to saving costs, effort and quickening the returns of the investment.
Author: Riley Larsen | [email protected]
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If your company is struggling with an incomplete or failed ERP implementation, our ERP and CRM Consulting Services Team is here to help. Contact us to learn how our services can help you course-correct and achieve the intended operational results from your ERP system.
