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Avoiding a Failed ERP Implementation – Top Tips for Setting the Timeline Right


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Implementing an ERP system is one of the most important decisions an organization will ever make. And when you eventually take the plunge, you will expect the ERP system to act as a magic wand. From assuming the ERP system will solve your organizational mess, to envisioning an instant ROI, there will  countless unreasonable expectations. Taking the first step in implementing an ERP is commendable, but not having realistic expectations can spell doom for your organization. According to Panorama’s 2016 ERP Report, most companies struggle with setting the right ERP implementation timeline. 57% of organizations take longer than expected to implement their ERP systems – largely because they had unrealistic expectations in the first place. Budget, time, and resource miscalculations early in the planning process is one of the prime causes for failed ERP implementations.

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A majority of organizations take longer than expected to implement their ERP systems, resulting in substantial budget overruns, something no organization would want.  You do not want to invest into a highly capable ERP software like Dynamics AX, only to see it fail. So let's look at a few tips that will help you plan and execute an ERP implementation with a realistic timeline:

  1. Look Beyond the Sales Hype: While the use of implementation accelerators and industry best practices can facilitate a fast implementation, in reality, every organization is unique, which makes every ERP project unique and that requires considerable time, effort, and resources to clinch a positive result.
  2. Benchmark: Although Microsoft might say that a Dynamics AX system takes only a few months to implement,  this implementation scenario may not apply to your organization. Most ERP implementations take, on an average, 21 months. With that in mind, it is important for you to find out how much time other companies in your industry and of your size invest in their Dynamics AX initiatives and then arrive at an achievable number.
  3. Reengineer Processes: Most ERP vendors will tell you to not worry about your business processes because implementing their software will solve all of your problems. But since ERP systems like Dynamics AX are built to cater to the entire spectrum of organizations, it may require considerable effort to define business processes that are exclusive to your business. Putting in the effort to reengineer your business processes to a certain degree prior to implementing the AX software will reduce extensive customization required ultimately minimizing time, reducing costs, and maximizing business benefits.
  4. Build a Comprehensive Implementation Plan: If you miss out on including key activities such as data conversion or training requirements or even process issues, then you are less likely to be working from a realistic standpoint. Involve all your ERP stakeholders and ensure that your implementation plan includes all of the tasks that are absolutely essential for a successful ERP implementation.
  5. Embrace a Strong Governance Model: ERP implementations often overrun the timeline in absence of a strong governance model. Having well defined controls in place will ensure that customization requirements, scope expansions, and other typical risks don’t cause your project to derail. Having clearly defined processes in place will allow your project team to examine any decisions that could make a mess of the calculated timeframe.
  6. Communicate: Communication between the various ERP implementation teams is key to arriving at a realistic timeline estimate. Integrating constructive communication plans into every phase of the implementation project and having weekly status meetings between the project committee and the implementation team from the start of the project kick off minimizes the chances of project derailment. Also, regular conversations with Microsoft will help in determining which goals are a priority and which are not, as this might alter the scope and corresponding timeline of the project.
  7. The Importance of Deliverables: As the implementation team is majorly responsible for accurately scheduling the project, by understanding project priorities and configuring deliverables around them, you can move forward with the project with a realistic expectation about what it will take to complete the project in the way it was intended.
  8. Prepare for Timeline Disruptions: No matter how well you plan your implementation strategy, it is always good to be prepared for timeline disruptions. Since most organizations aren’t ERP experts, there is a strong likelihood of not being able to anticipate or identify factors that can contribute to longer-than-expected commitments. By factoring in processes that might get stretched (like customizations or change management), you can weed out unrealistic expectations and assumptions and be prepared for a worst-case scenario. According to a Deloitte CIO survey, of the top 10 barriers to a successful ERP journey, five can be addressed by developing and implementing a structured change management program. 

Getting it Right

Dynamics AX implementations are massive projects; they require substantial investments in terms of time, money, and resources. When you have unrealistic expectations from an ERP system, you may have to cut corners, invest additional money and time, and ultimately be at the receiving end of your key employees losing faith in the project. ERP implementation failures may happen due to a number of reasons, but it’s not about pointing fingers (or keeping them crossed) – it’s about making sure you get it right. So go on, be realistic, plan wisely, and get the ball rolling.

Even though you’ve implemented ERP at your organization, what should you look for, if you choose to re-implement? And can it be done successfully? What does a ‘failed state’ look like? Download this ebook that provides guidelines and suggestions on how to avoid a failed ERP implementation and see the business results you intended to receive.

failedaximp-ebook

by Indusa

One Response to “Avoiding a Failed ERP Implementation – Top Tips for Setting the Timeline Right”

  1. Morgan says:

    A great article. I completely agree with all of the points, particularly the point on communication. This is crucial as everyone in the organisation needs to understand what the ERP system is trying to do and how it can help them.

    I found this blog recently which stated the things that most businesses overlook when selecting an ERP solution for their company. Although your article has more points than this one, they still touch upon similar things. A point I particularly like from the below article is the focus on the future and how businesses can’t afford to get it wrong now as they will pay the price in 10, 15 years time. Here’s the link to the article if anybody else is interested:

    http://www.erpcentral.co.uk/resources/blog/what-do-most-businesses-overlook-when-selecting-an-erp-solution/

    Thanks for sharing,

    Morgan