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25Sep

5 Common ERP Implementation Mistakes Every SME Should Avoid

Tougher competition in the market encourages businesses to better optimize resource, ensure customer satisfaction and improve productivity.

Enterprise Resource Planning solution is the bedrock of every manufacturing organization that has come a long way to smoothen the business operations while boosting the overall growth.

Selecting an ERP in itself is a complicating and time-consuming task which requires exhaustive research and evaluation of multiple options. It is critical to ensure that the end results of deploying an ERP is – streamlined operations and real-time data visibility.

Once you’ve chosen the right ERP software for your business requirements, next is the software implementation. Now, what does implementation actually mean and why is it said that it should be done with utmost precision and dedication?

What is ERP Implementation?

ERP implementation is a process of installing the software, transferring the business data to new system, configuring users and processes and training the employees about how to use new software.

There are different stages of ERP implementation processes – identify the objectives and set the target, plan, monitor and measure the progress rate, gather detailed requirements for satiating customer’s needs, deployment of the software and post go-live processes.

It is not as easy as it is written here! As per The Robbins-Gioia Survey (2001), 51% businesses viewed their implementation as unsuccessful.

It may be because they have chosen an unsuitable ERP for their organization or may be because they have chosen a wrong ERP implementation partner. It may take weeks, months or even years to implement an ERP, depending on the size, nature and requirements of businesses. Once you have chosen the ERP software, the next step is implementation.

For a successful implementation, it is better to work diligently on it and know about certain pain points as overcoming it can help you avoid falling into trap –

1. Selecting the wrong ERP software

The problem – Most of the businesses buy ERP without properly assessing it and knowing the organization’s needs

The solution – Every business is unique in its own ways. They use different set of technologies, different operations, and of course every process differs from each other. Selection of ERP is quite a tedious, time-consuming and mind-boggling process which needs you to evaluate multiple options that should serve the purpose of your business.

Capterra researched that approx. 33% of ERP buyers did not demo the software before investing in it. Also, 22% of the businesses were reported to buy the first ERP software they evaluated. This can be fatal for both the ERP buyers as well as the vendors who sell it. If you evaluate the ERP solutions, take time to analyze how it can help you meet your goals, then it will reduce extra customization cost and implementation time.

2. Poor planning

The problem – Businesses don’t know where and when the exact amount of money, time and resources are required

The solution – Whether it is about manpower or money, it is always advisable to create a roadmap much before initiating it and bringing it to execution. It should be ensured that none of the steps are missed out from the process and it should be planned in such a way that eventual implementation is successful.

Firstly, it is good to identify the actual objectives behind ERP implementation and which areas will be improved by it. Also inadequately defined goals and lack of attention leads to unnecessary overhead costs.

Because of poor planning, 63% of the ERP implementations reached exorbitant prices and on an average, implementation time was exceeded by four months from the expected date – as per 2014 ERP report.

3. Reluctance to adapt

The problem – Not every employee in your company will be comfortable with the new ERP software

The solution – Employees working in any organization become resistant to change. They have been working on the archaic systems with defined processes. It is the managerial staff who is responsible for making the users comfortable with the new ERP system by providing them appropriate training regarding its need, benefits and usage in a streamlined manner.

ERP is an intangible asset which will add more to business productivity by unifying data in one system and making it accessible across every department, irrespective of location.

Your employees should understand this and show keen interest in learning its ropes. Strong leadership qualities can bind the employees together and benefit the quality of implementation.

4. SMEs fail to focus on the future progression of business

The problem – Organizations fail to understand the need and scope of ERP

The solution – What is the reason behind you getting the software implemented for the organization? Of course, you foresee business growth, productivity and increased bottom-line. Considering this, every small and mid-sized business should clearly define their operational processes to add more to the future of business. Instead of just paving the cow paths, it is always better to plan and execute the operations in a well-defined manner.

For example, as a business owner you should know what are the pros and cons of on cloud deployment or on-premise deployment and align your business processes with either of these.

If you choose on cloud, then ensure to understand its prerequisites such as proper internet connectivity, subscription based payments, remote implementation and more.

On the contrary, on premise deployment of enterprise resource planning software throws light on large upfront fees, dedicated IT personnel, up-to-date servers etc.

Take time to evaluate your needs and thereafter select the deployment type that fits your unique business requirements in the best possible manner.

5. Knowledge transfer and training

The problem – Most of the ERP implementations fail to deliver productive results. Reasons may be inappropriate customization, ill-trained personnel and more.

The solution – As per a research by panorama consulting, 21% of the ERP implementations fail because of the aforementioned reasons. Needless to say that training is one of the most significant aspects of ERP implementation process which ensures that there is less chance of errors and assured success.

With proper practice of tools and technology, you can identify the glitches in the organization and redesign the business processes. By giving proper training sessions to the end users, they can learn and run the ERP system at a faster pace, this will enhance their confidence towards using the software.

If you have any query about ERP implementation process or if you want to learn more about how ERP implementations work, please feel free to drop an email – info@optiproerp.co.in.