How to avoid ERP failures

What is ERP?

ERP stands for Enterprise Resource Planning. This is an information system that integrates all manufacturing and related applications for an entire enterprise.

An ERP is a great idea for manufacturers if it is done right. ERP failure on the other hand is a big problem as it involves great money. However, ERP success makes great money. In order to avoid ERP failure you should know what causes it:

The causes of ERP failure can be a result of any of the following elements acting in combination or individually. These are to name a few:

1. Trouble in Installation
2. Business related issues
3. Reluctance of end Users

Obviously knowing what causes ERP failure can help you to avoid it, so let's take a closer look, and see what things can be done to eliminate the chances of this happening to you:

1. Trouble in Installation: Basically if the initial stages of implementations are not done properly, you have a great chance for ERP failure. Thus, to avoid ERP failure changes need to be done in accordance with the needs and modalities of the concerned organization. And, all involved must be aware that these changes often defeat the very purpose and functioning of ERP so, making sure that the process goes smoothly, and the customizations that ERP undergoes are truly beneficial. These are the areas of change to look out for: changes that effect organizational policy, funds allocated and stipulated or allotted time.

   The confusions in this stage are likely to have a drastic effect on the proper implementation. So avoid ERP failure because of this by testing it properly before it goes live, and by doing so eliminate confusions.

2. Business Related Issues: ERP calls for a modification of the business process, however ERP systems are seldom suited to stay in tune with the unprecedented ups and downs in the market. This either makes ERP function meaningless or puts the business survival into question. So, rather than have this result in ERP failure, be sure to make your system flexible enough to deal with these changes.
3. Reluctance of end users: This is probably one of the biggest causes of ERP failure. If you implement it and people won't use it, it will fail. Why would your staff be reluctant to use ERP? Well, this comes from a number of places. For example, The fear in reducing the work force, hesitation to learn new technology, or more likely, the lack of confidence to handle it. All of these can be overcome through information, which will be discussed a bit later. Other factors that make ERP fail because of the end user is wrong usage or improper usage, or improper training. If you can train your staff on how to use the system, and teach them how it positively effects them, you are less likely to have ERP failure.

Besides all of the above reasons, many times your employees will see ERP as a burden and seldom realize the benefits. Why is this? Well, for one, like anything new the beginning takes a lot of extra work. What employee wants to work harder for the same pay? Also, because ERP implementation requires extra work initially employees tend to develop a negative mindset about it from the get go. What they don't understand is the comforts that will come their way once it is implemented and working properly. Like the above issue, the best way to avoid ERP failure due to this is proper training, and feeding your employees the information that allows them to see the end goal, and justify a little extra work upfront.

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Categories: Business Strategy,

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Tags: ERP enterprise resource planning ERP failure ERP implementation