Watch out for any ERP Implementation which has not seen the light of the day! Time and cost over runs, built up frustrations, low user acceptance levels is common in such environments. Analyzing failed implementations is itself an education. Some common factors emerge which are simple to understand but difficult to practice. A little care by organisations at time of implementations will help in avoiding such pitfalls and save the embarrassment for all stakeholders. The key payoffs for a successfully deployed ERP system includes increased productivity, shorter cycle times, lower inventory and higher operating profits. Implementing ERP means huge changes to culture and processes. This is the key area where SME's falter.
1. Ensure the business case always comes up first.
Answer the questions
• Why does the enterprise need ERP?
• What business problems will ERP solve?
• What are your business priorities?
• What is the business value you hope to receive in concrete
and measurable terms?
Unless it is measured it is not done. many ERP implementations fail due to lack of well laid policies.
2. Executive Sponsorship
Securing executive sponsorship is critical. The executive sponsoring the ERP project must have the political clout to initiate and fund the project and sustain it through implementation. In many small businesses, this executive will be the CEO. The executive sponsor instills a sense of urgency and holds others accountable for completing project activities on time. The executive sponsor should:
• Clearly outline the organization’s strategic priorities in line
with the proposed system.
• Involve members of the organization at appropriate levels.
• Link management controls and incentives to project success
3. End users make or break ERP projects
This is an important aspect of failed implementations if right team members are not part of the project team. End users tend to "hijack" the implementation if there is no proper control over the project. Proper briefing and communication protocol among all layers of the team is essential to keep end users in control.
4. Build the Right Project Team
Get process champions from the business not from IT! get those who are good not just those who are available.
5. Dealing with Consultants
Identify and Resolve Potential issues before they become Big. Ensure that the consultants contracted have “trench experience” in your industry and thoroughly understand the solution you’ve selected.
6. Estimating Time and Resources
Most organisations underestimate the time and resources required to implement an ERP solution. Drawn-out
implementations increase the risk of project failure. Lengthy implementations may also reduce management commitment and confidence in the project team’s ability to deliver quick business results. Don’t start by designing an ERP system that is beyond the capability of your company to absorb. Deciding what not to
do is just as critical to delivering a successful project.
7. Don’t Hedge on Training
Not providing quality training is a surefire way to set your implementation up for failure. The consequences of inadequate training can be problems with end-user acceptance and the system not delivering expected results. Organisations must realize that training expenses are high (10 percent to 15 percent of the total project outlay)because the training must address organizational changes and learning new business processes — not just how to use the new
software.
8. Continuous Improvement
Don’t disassemble the ERP project team after implementation.Bring the team back periodically for iterative review of the system’s performance to ensure continuous improvement and maximum ROI. Comparing actual numbers with previously established benchmarks will reveal whether the system is or isn’t doing what it was originally intended to do. ERP is not a static process or mind-set. ERP only lays the foundation for more substantial improvements that can provide true distinction and
competitive advantage.
Bottom Line: SMBs should develop a well-thought-out and
comprehensive plan to help guide and control their ERP
implementation effort. Upfront, pre-implementation work is critical
for being successful.
1. Ensure the business case always comes up first.
Answer the questions
• Why does the enterprise need ERP?
• What business problems will ERP solve?
• What are your business priorities?
• What is the business value you hope to receive in concrete
and measurable terms?
Unless it is measured it is not done. many ERP implementations fail due to lack of well laid policies.
2. Executive Sponsorship
Securing executive sponsorship is critical. The executive sponsoring the ERP project must have the political clout to initiate and fund the project and sustain it through implementation. In many small businesses, this executive will be the CEO. The executive sponsor instills a sense of urgency and holds others accountable for completing project activities on time. The executive sponsor should:
• Clearly outline the organization’s strategic priorities in line
with the proposed system.
• Involve members of the organization at appropriate levels.
• Link management controls and incentives to project success
3. End users make or break ERP projects
This is an important aspect of failed implementations if right team members are not part of the project team. End users tend to "hijack" the implementation if there is no proper control over the project. Proper briefing and communication protocol among all layers of the team is essential to keep end users in control.
4. Build the Right Project Team
Get process champions from the business not from IT! get those who are good not just those who are available.
5. Dealing with Consultants
Identify and Resolve Potential issues before they become Big. Ensure that the consultants contracted have “trench experience” in your industry and thoroughly understand the solution you’ve selected.
6. Estimating Time and Resources
Most organisations underestimate the time and resources required to implement an ERP solution. Drawn-out
implementations increase the risk of project failure. Lengthy implementations may also reduce management commitment and confidence in the project team’s ability to deliver quick business results. Don’t start by designing an ERP system that is beyond the capability of your company to absorb. Deciding what not to
do is just as critical to delivering a successful project.
7. Don’t Hedge on Training
Not providing quality training is a surefire way to set your implementation up for failure. The consequences of inadequate training can be problems with end-user acceptance and the system not delivering expected results. Organisations must realize that training expenses are high (10 percent to 15 percent of the total project outlay)because the training must address organizational changes and learning new business processes — not just how to use the new
software.
8. Continuous Improvement
Don’t disassemble the ERP project team after implementation.Bring the team back periodically for iterative review of the system’s performance to ensure continuous improvement and maximum ROI. Comparing actual numbers with previously established benchmarks will reveal whether the system is or isn’t doing what it was originally intended to do. ERP is not a static process or mind-set. ERP only lays the foundation for more substantial improvements that can provide true distinction and
competitive advantage.
Bottom Line: SMBs should develop a well-thought-out and
comprehensive plan to help guide and control their ERP
implementation effort. Upfront, pre-implementation work is critical
for being successful.
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