ERP software has become a mission critical app for many businesses. Successful companies depend on their ERP systems to keep their business processes flowing smoothly. Furthermore, those businesses that failed to properly implement ERP software have often found themselves with large holes in their budgets and countless hours wasted on loss mitigation.
As the saying goes, those who do not learn from the mistakes of the past are doomed to repeat them in the future. To help you with this ever-so-important history lesson, ITworld.com has put together a list of 13 awful ERP mistakes based on a survey of numerous ERP experts, including vendors, customers, and consultants. If you can avoid these 13 mistakes, you might just have a shot at reaching your goals.
Poor planning – When a business fails to adequately plan an ERP implementation, it may have failed before even getting started. Once the dust settles, your ERP system will have a profound effect on your business process. Therefore, you should study the process ahead of time and ensure that the ERP system you choose is compatible with it and will mesh well with your objectives. Just as a hopeful presidential candidate might set up an “exploratory committee” to consider the possibility of considering a run for office, you should be just as careful with ERP.
Not properly vetting ERP vendors – That one vendor – you know the one. They came riding in on what might as well have been a unicorn and poured a rainbow into your computer. OK, maybe it was not that impressive, but they made enough of an impression to make you forget about the rest and essentially make an impulse buy. Always remember, an ERP vendor is a business, and they are trying to sell you a product. You have to be a conscientious consumer. Do your homework. Contact other customers and find out about their experiences, successes, and failures.
Not understanding or using key features – Only 46 percent of ERP customers surveyed actually have a good understanding of the features in their ERP systems. That means most companies are blindly wading through ERP waters hoping to figure it out and be successful. This is a horrible strategy. In fact, it is probably not a strategy at all. It is entirely possible to have a bad experience with your ERP system solely because you fail to understand or even recognize the existence of key features. The foundation of a good ERP implementation is knowledge, and the root of most failures is ignorance.
Underestimating the time and resources required – You have probably heard the horror stories of companies that thought they were going to pay $100,000 to implement an ERP system and ended up spending millions. Some of these stories are largely the fault of the vendors, but there are situations where the ERP customer simply needs to be aware of the total cost of ownership before getting involved. The sticker price is only the beginning. Moreover, full implementation does not end with software installation. You need to be cognizant of how much time everything, including training and consultation, will take.
The above four mistakes are mainly about problems that come from not being prepared. The next five will dive into some of the problems with actual implementation.