Although every organization has differing definitions of “success” and “failure,” we found that more companies are defining their projects as failures when compared to previous years. Also, less companies are saying they would have chosen the same ERP software vendor again if they could do it all over again. This suggests that companies are struggling to select and implement ERP systems in a way that they would consider a success.
ERP solutions are great, but successful implementation requires careful thought, consideration and engagement from all stakeholders. According to analyst firm Gartner, approximately 75 percent of all ERP projects fail, despite the industry’s focus on delivering better customer service and advanced IT systems. But why?
ERP Solution selection should follow a strategic approach and disciplined process in order to maximize the likelihood of successful outcome. The following resolutions could be used to create clarity in this world of ERP Confusion.
1. Choosing the Right Vendor or Partner Before making a financial commitment, ERP decision-makers must;
Understand the market and software regulations in the country;
Vendor or partner’s Profile, Range of solutions and Services offered.
Software comparison and industry standards;
Solution Level of flexibility
2. Scrutinization of business process workflows - Even though businesses spent a significant amount of time selecting their ERP partner, there might be serious issues during implementation of the new system. The following are procedures necessary at design phase to meet identified objectives;
Mapping of upgraded processes
Possibly incorporate best practices within the context of the ERP application
Describe new functionality
Ultimately determine the method of deployment
3. Transparency - Clear communication of Financials & Payment terms, Work plan, Key Resources and roll-out strategy. A lack of transparency appears to be at the heart of things, with 71 percent believing that their reseller partner or vendor could be more transparent when it comes to the total cost of the project; while others admit they are unsure about the level of honesty offered by their partners.
4. Thorough Understanding of Application Requirements - By taking time to really get under the skin of a customer, a solution can become a strategic proposition – rather than just everyday infrastructure. When a customer’s budget is cut by 25 percent, IT decision-makers will be looking at where to make savings and quantifiable ROI. Offering them real added value and consultation may tip the balance. Customer service should always be at the forefront of your mind. There’s no substitute for human conversation!
5. Ensure Standardization during Customization - When customization increases, so does the cost and complexity of ERP projects, causing them to be delivered late and over budget. Therefore it makes sense to keep implementations as standardized as possible, focusing on the customization that really add value.
Given ERP is one of the biggest IT investments businesses make, particularly for mid-size organisations, it’s vital that the journey from supplier sourcing to end-users going live is a smooth one. A company’s ability to see a return on an ERP project tends to depend on how quickly it can deploy a new system, and whether it’s in line with what was promised at the outset. Any delay or overspend can have a massive impact.