Five Steps to Avoid ERP Failure

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According to a report Panorama Consulting released last year, ERP (Enterprise Resource Planning) implementation failures are on the rise. It’s no shock that one of the most complicated software systems in existence ends up being difficult to implement, but the reasons behind the failure rate may surprise you.

erp failure

A report from Deloitte detailed the top ten barriers to a successful ERP implementation.  None of the top issues had anything to do with the software itself. They were all team-, communication-, or employee-based. Broadly speaking, these problems are all problems with change management.

A company that is instituting a massive overhaul of any system has to be ready for the change at all of the affected levels. With a product like an ERP, every level is going to be affected.

Change management is a complicated process, but in any ERP implementation, there are going to be five huge steps to prepare yourself for success.

1. Get buy-in across the organization

If you’re going to be changing the way every single person in your businesses works, you need to convince them that they should help you get things up and running. This can be a frustrating process if you’re a) working with “old-timers” who know and love the current system, b) taking away someone’s authority or perceived autonomy, or c) not really helping people.

For the first two issues, you’ll need to be able to clearly explain why the changes being made will benefit your audience. I’d love to say that everyone will eventually listen to reason, but that’s not true. If you have a clear business case for your new ERP and you still get pushback, you’ll just have to involve management at a new level. Buy-in is best when it’s voluntary, but some people just have to be told to do their job.

If you’re facing the final problem, you’re in a stickier situation. An ERP that hurts members of your organization – either by giving them more work or by making the work they do more difficult – is unlikely to be the right solution. If you meet resistance from a well-informed and accurate dissenter, don’t just sweep them under the rug – fix the issue.

2. Have a clear (flexible) timeline

Putting an ERP in place is a huge undertaking and no one likes to be left in the dark. Even your strongest supporters may jump ship if things drag on too long. You can only tell folks that things will be better next week for a little while before they stop believing you. Unfortunately, ERP implementations have a tendency to overrun their initial time estimates.

Before you sit down and tell everyone when things are happening, give them a realistic idea of how long things usually take and how long they can take. Ranges are good. We’ve already determined that the technology is going to work, now you just need people to remain invested in the project.

Regular and transparent updates on the progress of the project will be key, so make sure to have emails, meetings, or calls scheduled from day one.

3. Listen, listen, listen

If you don’t want a munity on your hands, you’ve got to listen to the crew. If you steer the ship into an iceberg, people are going to throw you overboard. If you all steer into the iceberg, you just start bailing together. That was a lot of nautical metaphor to have all in one place.

The company that works together succeeds together. On those regular calls that you have set up, take feedback from employees about how things are going in their division. Put out surveys, interview employees, and talk to the folks who are putting up with the change on a daily basis.

The sooner you can spot issues, the sooner you can correct course.

4. Train everyone before you go live

Once you’re in the home stretch, your entire staff may be so focused on the goal that they fail to get in the proper training. This may seem like a no-brainer, but if people don’t understand how to use the new system, they won’t use the new system – or worse, they will use the new system.

As part of your technical planning, you’ll undergo some data cleaning on your current system. That means starting with a fresh set of data with your new ERP. If you don’t give people adequate training, they’ll fall right back into old habits, making a mockery of the clean data.

You may get a training package with your ERP or you may have to go outside to find a specialized trainer. Companies like Junction Solutions and Panorama Consulting offer this sort of training and can be incredibly helpful before launch.

5. Listen again

Haha – Gotcha. You thought after you listened to people complain once you could just be done with all that and move on to the money saving and big data wins. Nope, you have to go back and listen again.

In general, communication breakdown is why projects fail. A Gartner study of project failures in 2012 found that many projects suffered from “planners not asking the right questions.” This leads to unrealistic expectations, scope creep, and other issues with project success.

Keep lines of communication open throughout the entire implementation process and you’ll drastically increase your chances of success.

Conclusion

Putting a new ERP system in place is one of the most challenging IT issues a company can face. By being prepared, you can set yourself up for success instead of failure. Just remember to:

  • Get adequate buy-in
  • Have a timeline for everyone to reference
  • Get feedback early
  • Train up your staff
  • Get feedback often

For more tips on ERP implementation and selection, check out Capterra’s logistics blog. If you’re looking for an ERP system, swing by our full ERP directory.

Header by Rachel Wille

Looking for Enterprise Resource Planning software? Check out Capterra's list of the best Enterprise Resource Planning software solutions.

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About the Author

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Andrew Marder

Andrew Marder is a former Capterra analyst.

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