Why is it so hard to implement ERP? For nearly half a century, businesses have been deploying some iteration of this software—material requirements planning (MRP) software in the 1960s, manufacturing resources planning (MRP-II) in the 70s and 80s to a wide variety of options today—yet the same question still gets asked.
Those Who Fail to Learn from History Are Doomed to Repeat It
Despite how standardized the processes, the statistics are still demoralizing: Up to 75% of implementation projects fail to return the value promised. Add to this the rash of headlines that pop up in the event of a high profile failure and it’s enough to strike fear in some. However, it takes a special kind of value proposition for a company to take such a risk—and for many companies, the reward is worth it.
There are many reasons that companies like yours make the leap, and in the coming months, we will explore some of the decisions you will need to make and things to avoid if you want to get it right.
There is a lot to learn from ERP failure horror stories, many of which read the same as they did a decade ago. From mismanaged expectations to poorly documenting needs to what can only be described as end-user mutiny, over the next few months, we will explore different reasons why ERP implementations get derailed and discuss a way to overcome it.
ERP Failure: The End User Mutiny
Imagine the process. You decide to upgrade, get backing from the board, choose the vendor and partner, and get down to business. Only problem? You completely ignored the people who will be using the software.
Change is hard, ERP changes are stressful, and no one likes to have something thrown upon them. Knowing this, over the 3-12 months or more that it takes to complete an ERP implementation, you’re bound to have brushback, dissent, or anger.
Improperly handled, a decision to change ERP software without the right communication, change management, or project leadership could result in anything from users refusing to use software to shadow IT to staff resignations. Just imagine the following scenarios:
Completing a costly implementation project to find out that end-users decided to ignore the new software and use (or keep using) Excel. It happens quite often.
Losing your data because an end-user didn’t like the functionality and installed a plugin or application that wasn’t properly vetted by the IT team.
Watching staff turn in their two weeks’ notice because they hate the software or because they feel (with or without justification) it makes their job harder.
Leading your organization through an ERP implementation requires your business to have the right people on board and the right communication initiatives in place to keep morale high, make people feel like their input matters, and ultimately lead your company through the complexities that will come up.
Solution: A Well-Informed and Communicative Team
Major business decisions can’t be made in a bubble. Without communication, input, or leadership, the project already starts on shaky ground, destined to fail if a department doesn’t feel adequately represented or informed. To address this, you need to build an ERP Implementation team and define their individual responsibilities. Including someone who can take charge of the project, team or department representatives who can answer “what is it exactly we need?” and other members who we will discuss below:
Your project team should have adequate representation from all areas of the business – engineering, materials, production, finance, customer service, etc. in addition to IT. Notable members of this team include:
Executive Sponsor: The executive sponsor provides the vision and the commitment to keep the project moving forward in the presence of other demands or priorities. While not an all-encompassing job, the sponsor needs to keep everyone moving forward, providing inspiration and resolving conflicts.
Project Leader: This person should know and understand your business, have management skills, and be a good communicator. He or she keeps the team organized and on track. The team leader chairs the weekly status meetings with the task leaders and coordinates between the various sectors of the business and tasks.
User Community and Team Leaders: Many end users will balk at the idea of new software, often because they haven’t seen what’s better. As you decide to make the move, choosing one or a few people from each department to ask end-users about challenges and needs with other end users can help identify ideal next steps.
The Communications Team: An often-overlooked group in an ERP project, the communications team will keep team members and leaders informed of the project milestones, involvement, and more.
Successful Implementations Start with Milestone
System implementation is always a team effort. Get as many people involved in the project as early as possible – before and during system selection – so they feel like they have a stake in the system, a sense of “ownership.”
Those not directly involved should also be able to follow along as the project proceeds, so there is less fear of change or fear of the unknown to dull their anticipation of the availability of these new business management tools.