5 common ERP project mistakes to avoid

Companies unremittingly strive for better market share by adopting tools and resources that not only efficiently and effectively facilitate their day to day operations but also provide strategic long-term leverage above competition. Nothing comes without any inherent risks, therefore, taking uninformed or “spur-of-the-moment” decisions, attempting a large scale corporate-wide strategic project without thorough thought, long-term planning and the correct management of resource, could not only be counter-productive, but also jeopardise substantial finances of the company and possibly its survival.

So when the top brass have taken a strategic decision that the company will be adopting an ERP system as the corporate business management tool, and you have been tasked with making this happen, what are some common mistakes repeatedly encountered when embarking on the ERP path, which can be avoided? And yes, we know that this is easier said than done, but at least you know what to look out for.

IT project or a corporate commitment?

While the organisation’s IT department will definitely have a crucial role in the major technical aspects of an ERP implementation, commitment is a corporate-wide endeavour with practically all departments and employees compelled to responsibly provide considerable effort to the overall success of the project. On that note: our colleague Ailsa has written a great related blog post about the importance of getting all your people on board and pulling on the same string to help your ERP implementation succeed – well worth a read.

Since the ERP system will affect the entire organisation’s departments and the respective operations. At the very least, each department’s operation will need to be thoroughly analysed and mapped out to the new ERP application. However, in reality, some business process re-organisation will probably be undertaken to identify redundant tasks, improve efficiency and align the department’s functional aspects to the new ERP system.

Management should ensure that the environment, policies and the entire organisation’s backing is in place to reduce failure risks, and for the ERP solution to succeed. Again – have a read through Ailsa’s blog post “Getting all your people on board“.

Underestimating resources (such as timescales / effort / costs)

ERP systems bring various benefits and strategic advantages to organisations that internal studies would have established before embarking the ERP route. Once the benefits outweigh the costs and the funding is established, the journey begins.

Organisational and financial pressures mount in order to see the project completed in the shortest possible time. Costs are rightfully expected to be kept at the barest minimum while recovery of such costs is eagerly anticipated.

While resources are always a scarce commodity and understandably all organisations need to keep a firm grip on the resources required for such an ERP journey, temptation to rush and cut corners should be avoided. ERP systems are not usually implemented and ready in a matter of days. Even the simplest out of the box, no customisation or integration tasks installation, will still require a lot of other direct and indirectly related tasks for a successful implementation. The more complex and multi-functional the ERP system is, the more resources are going to be necessitated (time, effort, costs). Even then, once the system is seen to be complete, the real transition to the system continues for a period of time.

Organisations might be tempted to put unreasonable pressure towards the shortest possible implementation time. Settling to unrealistic demands will inevitably lead to risky accelerated shortcuts and missing out on essential tasks. Having access to experts in ERP implementations should not be discounted especially to help in providing planning expertise and clout for properly resourced ERP implementations.

Training

ERP solutions are far from being petty cash investments, while resources on the other hand are universally limited. There are various tasks in an ERP plan competing for both human and financial resources.

With such a demanding scenario, it is frequently tempting to mis-judge the value of training and give this activity the short stick. ERP is one solution that is both demanding and involving many employees of the organisation and therefore needs full compliance by the workforce for its successful release.

While it could perhaps be seen as finically intensive and time consuming to carry out broad training sessions, without it, the full potential is not gained. Likewise, once the benefit of training is recognised, planning for it, designing its contents and the emphases on hands-on rather than exclusively relying on presentation based training should not be underestimated. Attendee numbers per class should be designed to be manageable and conducive for learning and discussion of the system itself and the bigger picture which it fulfils.

The preceding blog post also outlines just how essential it is to provide proper training to the people who will be using the system in the day-to-day operations.

Data migration & Integration

The ERP system may not be the only application used within the organisation, a company might have other systems in place servicing its line of business and perhaps some of the ERP’s standard or custom functionality will replace a variety of incumbent systems.

Whatever the circumstances, it is often found that there may be requirements for some integration between the ERP application and other business systems. Likely candidates for integration are eCommerce systems and Web portals amongst others. Our eCommerce Sales Manager, Barry, wrote about why it’s crucial to integrate your systems properly – they need to talk to each other just like your teams.

Equally important is the migration of data from other legacy systems that will likely require data cleansing for consistency / quality and possibly some data transformations before eventually transferred into the new ERP system.

System integrations and data transfer requirements should be identified and planned for, both at the initial analysis phases and at subsequent design stages. Anything short of this will prove to be costly at later stages.

Trial running go live

So you finally get there – it was a long and intrepid journey with stringent deadlines, detailed planning and the subsequent execution of tasks to finally deliver a thoroughly tested ERP system with all its functionality, customisations and integration tasks. The route was not without its particular challenges, however they were confidently overcome. The big date is set – the anticipated tasks have been methodically laid out, moreover all necessary people for the implementation are advised and up to date.

It would be foolhardy to actually go for a go-live implementation without performing probing trial-runs before that. At the minimum, one mock attempt should be arranged for at the initial planning stages, or cautiously better, two mock attempts to average out results, if budget considerations permit so.

The precise environmental conditions should be simulated down to the very specific named day/s of the week the go-live implementation is planned for. No factor of chance should be left out. After all, following all the investment of resources to deliver this mammoth implementation, the risk of switching off one system in favour of a newer one with all the commitment of resources can wipe out confidence on the system, the implementers, management and organisation itself – including financial losses.

Implementation tasks should be thoroughly listed out on specific forms with data, such as the expected time for each task and the actual time taken. The fundamental aim at this stage is to recreate the most plausible and realistic environmental factors in a laboratory like test, where it is acceptable for things not to be picture perfect. In fact, the scope of such tasks is to identify any hidden issues or missing tasks that deviate from the original implementation plan and to measure each task’s elapsed time. Furthermore, any resource constraints can be identified.

So this is our list of 5 “obvious” mistakes that can be avoided if thoroughly planned for. Should you have any questions about this or need help or advice with anything related to ERP, systems integration or the like, please get in touch and let us know – we’d love to hear from you!