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ERP implementation failure | Reasons

ERP failure

ERP for a company is like oxygen to life, for organizations to coordinate their operations and processes. And, ERP implementation failure can mess up the business game. ERP plays a critical role in managing a company’s finances, human resource activities, supply chain, and a variety of other functions like data-driven decision making which helps to address the dynamics of a business.

However, ERP implementation is not always straightforward, and it might go wrong in various circumstances. ERP Implementation failure might occur if you don’t plan carefully and don’t devote enough time and effort required for such transformation.

To ensure the success of ERP implementation we need to understand some of the reasons of ERP implementation failure Below is a list of the most common causes.

Selecting the wrong ERP software can lead to ERP implementation failure

The ERP software selection process should not be taken lightly because not all software will work for your company. Every organization is different and so are its needs. It is important to proceed with caution when making a decision. If you believe that any software will work for your company and you choose it based on incomplete knowledge, it will cause more harm than good.

For example, if you own a small business, you should not use a complex and expensive ERP system. So selection of the right ERP is essential for its successful implementation.

Resistance to change

The majority of an organization’s old processes are altered when it implements ERP systems. Employees are human beings who always find it hard to change the way they do routine activities. Employees who operate with old systems are resistant to change since it requires them to leave their comfort zones.

So there is always a resistance to changes as most of the job responsibilities shift and the way of execution changes. As a result, it is critical for an organization onboarding a new ERP system to get a methodical way of bringing an enterprise-wide change which is known as change management which includes educating its employees about the benefits of the new ERP system and demonstrating to them how it will solve the majority of problems when compared to the traditional way of working.

So, organizations must invest in change management which includes employee training and provides them with sufficient resources to understand the processes because forcing employees to accept change will not work. Allow employees enough time to learn the processes so that they are ready for upcoming projects.

Recruiting inexperienced implementation partner

Choosing the wrong ERP implementation partner or service provider will ensure implementation failure. Your service provider must have experience with your type of organization so that they completely understand your business process.

Check that the vendor’s product is compatible with your company’s systems.

Make certain that the vendor completely understands your industry and its business problems, understands the ERP system he is implementing and is prepared to provide customized ERP based on your requirements.

Also, it is very important that you ask for references from your vendors. Every ERP vendor should give you the names of a few clients you can talk to know about the implementation process and client satisfaction. 

Unclear requirements

Unclear requirements often lead to failure of implementation as the project can cost more than you estimated. If an organization is not clear about its requirements that may result in customizing the ERP system again and again which in return will cost the organization more and will disturb the overall budget. As a result, it is critical to understand your organization’s requirements and communicate them clearly to your vendors.

Rushing the Implementation

Implementing an ERP system is not a simple task. Every organization must understand it will take time to customize new systems according to their requirements. Rushing and hurrying are not gonna help the organization and its goals.

So an organization must set realistic expectations and the time needed for the same.

Conclusion

Implementing ERP can provide significant benefits to your organization. It will help you manage all your business processes with ease. But you must understand it will take time and enough resources along with careful planning to have a successful implementation.

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