businessBusiness Coachingbusiness growthconsultantERPProcess Improvementsmall-businessWhy Organizations Implementing ERP Systems are Failing

May 20, 2021by Mikerash0

Without a doubt, companies embracing the future of technology stay ahead of the game upon the implementation of a successful ERP System. The key word here being successful.

While it is in the best interest of many companies to pivot-or continue to pivot- their operations to optimize efficiency in their workplace, doing so comes at a high cost and level of risk.

A recent Boomi survey reported that out of ninety four percent  of organizations working to implement their own ERP systems, over half have reported some type of failure. While many companies possess greater abilities in technology and leadership than they did in 2018-according to a Capgemini survey- lack of extensive knowledge pertaining to effective ERP installation generates indefinite problems. However, due to COVID-19, thirty one percent of organizations will increase spending in implementing their own transformational change in the next 12 months.

Top Reasons for ERP Implementation Failure

  1. Unrealistic Expectations: As with any initial excitement regarding creating long term improvement, motivation starts high, but keeping it around is the problem. Too much eagerness at the start leads to over exhaustion and eventual burnout, guaranteeing eventual failure. It’s important to maintain a clear list of goals, and outline a path to reach those goals.
  2. Not Embracing Change: Instead of viewing modern ERP Systems as an essential asset to the company, many organizations consider it as a level of prestige, distracting from the importance of user acceptance. To avoid this problem, it is crucial that those in higher leadership roles ask questions and receive feedback from staff to involve everyone in the process before it even begins. It is equally as important to ensure the desired solution is compatible with the organization and it’s staff.
  3. Incompetent Managers: Unfortunately, poor management is not uncommon in many businesses. This creates automatic hindrance upon the start of a significant project.
  4. Failure to Coincide ERP with the Business: A majority of ERP Systems fail because organizations are uncertain whether it is working for them or not, and despite a company’s greatest planning efforts, some things just don’t work out as planned. While most ERP systems don’t fail entirely, missing the mark on even the tiniest of bits can delay the project entirely-all without anyone entirely realizing.
  5. Not Budgeting for Software Implementation: In many cases, organizations are naïve to the fact that additional software-at some point-may be needed to purchase while implementing their ERP System. Failure to budget for these important expenses leads to distraction, ultimately resulting in an incomplete system.
  6. Not Training End Users: To the dismay of many organization, assuming employees will automatically retain knowledge in navigating the new ERP systems without proper training leads to countless mistakes and overall frustration on both parties.  To avoid this, it is the top management’s responsibility to elect someone who knows every aspect of the new system-and use their knowledge to train fellow employees on it’s use and functionalities to boost the chance of ERP success.

While many organizations initiate hasty response when turning towards ERP implementation, those who go about it the proper way experience limitless advantage and competitive edge. A few advantages of incorporating a modern ERP systems include:

  • Accurate and timely access to trusted information
  • Avoidance of redundancy
  • Optimization of business processes
  • Better usage of time
  • Elimination of unnecessary operations and data
  • And so much more

While incorporating a modern ERP System presents it’s greater challenges, the lasting advantages certainly prove its long term value. However, it’s your commitment and methods to implementation that determines your success. If this year has you excited for future opportunities and are ready to take on this change-but are unsure of how to do it correctly, contact us to get you on the right path to overall company optimization. Our team of experts have vast knowledge in a wide range of industries to provide you with the system right for your culture- modernizing your workplace, eliminating unnecessary baggage, and keeping your company on top of it’s game.

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