ERP fails

 

India is getting into a formal economy space. Regulations and compliance are getting stringent. Organisations will find difficult to meet the business demand and statutory compliance without a well integrated ERP system. So the obvious choice is to have a well integrated ERP system for all the business process.

But when we talk of ERP, most of the points are discussed around Cost and complexity. But the true issue is due to the inability to align the people of the organisation the ERP fails. Hence, the ERP is not a question of affordability or complexity. It is the ability of consumption & adoption.

Let me explain..

Different people of the organisation has different view about ERP. In every rganisation some End-Users and key users do not want to part with their data to a ERP system. They feel that their importance will be lost. Except for the CEO no one else understand the true need and value of an ERP system in the organisation.

They will not tell this openly. But they will go on raising issues under the name of training and customisation. The sad part is, many top management team also does not understand this game. They will also succumb to this, as a result the ERP fails.

80% of the ERP failure is because of this reason. But it all quietly attributed towards software, customisation, training etc., When there is problem in the head, the treatment and medication is given for the legs. Due to this wrong diagnostics the patient is dies. Exactly this is what happens for the ERP implementation.

Let me also share simple examples for this:

Standard Automobile

There are different cars with various design and price points. Once you decide on a car, the comparison should be stopped. You can’t make a Mahindra XUV 500 as a Toyota Innova or vice- versa. So once you decide on one vehicle all you have do is to drive it.

Car from a showroom is value for money.

If you are passionate about your car. You have a choice to Design and develop you own car. Are you technically and financially capable of that?

Standard lunch at Hotel

Having ordered for a plate meals, after it is served, don’t waste time to modify the recipe. Just focus on eating it. Pay the bill and move on.

Hotel food is value for time and money.

If you are particular about the food taste and quality. You have a choice to buy the provisions and vegetables and cook by yourself. The questions are Are you great chef? Do you have so much of time and money?

Standard ERP system

The same goes well an ERP system too. ERPs are designed with generic business requirements in mind. Having evaluated and bought the ERP system, just focus on adoption.

Standard ERP is value for money and time.

If you are so particular about your business requirements. You have choice to get 10 software developers, provide the business requirements and develop your own ERP system. Are you capable of developing an ERP system? Can you afford to maintain and support this effort on a ongoing basis?

It is not the ERP software or the affordability. It is due to lack of culture and failure of focus, ERP fails. Not adopting the ERP will only show the collective failure of the organisation.

ERP fails just because the CEO thinks it is good for the company and the few in the team thinks it not good for them. After all the ERP shifts the organisation’s data source from people centric to system centric. Even the previous generation business heads too still thinks that investment on ERP is not essential. Many CEOs are knowledgeable of the ERP systems, but they are stuck at that. But Implementation needs different mind set.

Conclusion:

Complacence is detrimental. Without proper IT system in place, the organisation cannot move to the next level. The CEOs has to bring an enormous force to ensure that the organisation is put on the ERP platform at any cost and no one else will do it.  Even if some heads has to roll-out, it is still worth it. To put this other way around, unfortunately unless the heads rolls-out ERP can not come in. My dear CEOs, make it happen!!

 

Vijay

Author Vijay

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