Top reason for the ERP failure.

 

ERP failure

There a 2 completely different stages for an ERP project. If this distinction is not rightly understood, either there will be a so-so ERP project running or it will lead to ERP failure. 

Stage I (This is like selection and buying the Car)

  • Selection of ERP
  • Evaluation of ERP for all the business use cases by the users
  • Total Cost of ERP project
    • Cost of ERP software
    • Hardware and software licenses or Hosting cost
    • Training and Implementation
    • Customisation
    • AMC
  • Time and schedule for implementation
  • Reference customers 
  • ERP vendor credentials
    • Consultants knowledge of the industry and the ERP system.
    • Implementation and Post Support
    • Upgrades
    • Financial year generation (the ERP product has to be at-least 5-6 years old to take care of the year rolling)

At this stage the company can depend upon the external consultants for guidance and support. However the company need to simultaneously develop 1 or 2 champions on the full project who can guide the users. 

A well defined ERP blueprint will help the proper implementation of the ERP system and to avoid ERP failure.

Stage II (This is like owning and driving the car)

At this stage the company’s internal team and the management has to take full ownership of the ERP system.

They can take guidance and support of the consultants and the ERP vendor’s team. But they should not depend on them. Such dependency will significantly reduce the utility value of the ERP system. This will be like depending on the outside driver for our Car. 

Also the internal team has to know the DOs and Don’ts of the ERP system. This includes regular backups, Server maintenance, patch management, Antivirus and firewall fine tuning. Bug reports and resolutions. This is once again like Car maintenance, servicing that includes daily cleaning,  Oil change, breaks, wheel balancing, air filter and oil filter change. On top of this being a very good driver makes all the difference. The same way very good and responsible users will be most important to mitigate ERP failure.

The responsible users are just a by-product of responsible management team. The management team has to be life-long supporters of the ERP project. Even if there are issues, the management team has to move forward and maintain cordial relations between the ERP vendors and the user groups. 

End of the day the Management team has to realise that the ERP is most important for them than anyone else in the company. Promoters management team can not delegate this aspect to the working group.

Conclusion: 

Good driving experience is a combination of good car, well maintained with passion for driving & excellent driving skills. 

To put this in simple terms, ERP is like financial position of the company. The top most management has to show equal interest for the ERP project as much as they show the interest in their financials, since ERP helps in stabilising the financials. 

Having selected the right ERP system, ERP failure simply shows the lack of top management’s will and commitment as well as their lack of learning abilities.

Companies without ERP or without proper ERP will always struggle for data and decision making. Struggle for data leads to leakage of profits and lack of management control over the organisation.  The only way is to develop a passion for technology and drive the ERP across the organisation.

Author Vijay

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