Common Mistakes to Avoid while Implementing ERP

If you have considered implementing ERP into your organization, you must have thought about how costly the implementation is, not to mention the most time consuming and complex task that the IT department can ever take on. The unexpected expenses and delays lurk on every side of the time it will be to implement the system. During its process, mistakes are highly inevitable, but by reading the following tips below, you will be able to avoid the mistakes that others have done before. It will help you avoid doing a mistake that of inviting a horror story to your business.

Failing to utilize or understand key features

One expert study revealed wherein 46 percent of the respondents showed having a good understanding of the features that were used in the ERP system. The experts are shocked of this figure because given that millions of companies have invested in this kind of system. This is less than 50 percent of the millions that have implemented ERP. If you don’t know the features that will help your company with ERP, companies will surely miss the opportunities that aid in automating business processes, meet objectives and complete the functions faster. Maintenance, enhancements, and upgrades are more costly, and they are more likely to fail.

For this mistake to be avoided, experts recommend creating a master list filled with tracking usage, features and review the list periodically to determine which of the features are most helpful and being used most of the time. It will become a knowledge catalog that can be utilized in writing test scripts, training new employees and even assist with compliance, audit, and the reporting requirements.

Underestimating the needed resources and time

This is harsh, and some may disagree, but all companies seem to underestimate the resources and time required in implementing the entirely new ERP system. How will business owners calculate the exact time needed for its implementation? The time can be estimated by dividing the software’s cost by 100. For example, if the cost of the software is $20,000, it will approximately take 200 man-hours or at least 5 weeks for implementing it, and this is done using a certified consultant. Doubling the number is needed when you plan to implement the system yourself yet with minimal assistance. It is also imperative that you assign a project manager dedicated to this work.

Having the wrong people

This is one sure recipe for disaster, especially if you have not done your research quite well. There are businesses that tend to bring in the wrong people right at the start of implementing the ERP. Implementing the ERP system into the company is one of the biggest projects to be made, not to mention one of the most costly. Whatever plans are made in this project, it can easily be put on hold or have to be set aside without the cooperation of the ones involved, such as having the wrong stakeholders. This can be solved when they are all cooperative with each other and are eyeing at the goal. It will also benefit the employees if they are actively engaged in the implementation of the ERP system into the company. They have to invest in getting things right, even at the very start.

Poor Planning

If you want the ERP to be a success in your business, planning is necessary. It is almost impossible to win ERP in a simple manner. You must have at least heard of businesses that took a toll on implementing ERP but based on studies from respondents; it was due to lack of careful planning. It seemed like they did not have enough up-front planning before they could even start an evaluation for the ERP software. This usually lead to confusion as the ERP begin since they did not have fully grasped the processes involved in it and how they can evolve the system to maximize the efficiencies and benefits to the business.

When faced with this problem, your business should perform an internal audit of all the policies and processes before they choose an ERP system. Added to that, experts recommend that you put together an evaluation team dedicated to studying about ERP. They must be composed of stakeholders in the business. When you feel that you do not have the capability to evaluate the ERP systems properly, you can also hire someone else outside of your business, such as a vendor-neutral consultant. They should have experience in implementing ERP solutions for businesses that involve in the same industry as you are.

Not checking the ERP vendors properly

There are businesses that are too excited that they lose sight of what they are aiming for. A lot of experts have shared that most of their clients get lost or ‘sold’ easily by the marketing team from the vendor. When the system gets implemented, they are very surprised by the restrictions of the system functionalities, the absence of capabilities and even the impact it has on the internal practices. The only way to avoid this kind of issue is to ask for references. You should look for 3 names of companies. These should be the ones that are in your business industry, the one you can contact and comfortable discuss software with. You should also be able to discuss functionality, features, and challenges. When the vendor can’t mention at least three names, you simply have to walk out and look for another. You do not want to end up as a guinea pig for them.

These are just some of the pointers you need to think about when you are about to implement ERP. Make sure to find other information to avoid the misfortune that befell others.