This is a tabulation of five most common mistakes that customers usually make while searching for and implementing a new enterprise resource planning solution (ERP). When an enterprise undergoes a digital transformation they get significant benefits as promised by digital vendors. However, there are many key areas where customers can make mistakes which can have devastating impacts including higher cost incurred and a poor return on investment.
Given below are some of the common mistakes that every enterprise should avoid.
Mistake 1: Biting Off Too Much
Taking a big leap in the form of complete digital transformation in one big push can be a disaster. It is important to understand the feasibility of the project and understand what is actually needed from an ERP system. In this case it is always recommended to spread the process of transformation over a greater amount of time and ensure that the transition is smooth. This is a measured approach and certainly has advantages over the “Big Bang” implementation which can create chaos. According to the report, the projects which are phased out and aim at small term gains have a greater success rate. The decision makers must realize that they should ensure that the business is running and is not affected by the transition to new system. It is crucial to develop the right scope to a project for any implementation.
Mistake 2: Thinking Alike For All Partners
Acknowledging the fact that the companies that demand a new ERP system are significantly diverse with differences in professional services, process manufacturing, distribution and retail, it is vital to find the right implementation partner that can have a proper understanding of your business. The penalties in lost time and resources for organizations that must switch partners mid-project can be enormous. The right partner guides the business as they transition workflows from the old system to the new one. Otherwise, there can be major delays and cost overruns which is obviously undesirable for any business.
Mistake 3: Ignoring the 80/20 Rule
According to reports, around 80% of the needs of the customers can be met by out-of-the-box capabilities while the remaining 20% require additional configuration by implementation partners and internal personnel. This approach ensures organizational management as many of the employees’ tasks could be completely different from how they were done with the old system. Undertaking change management ensures that the employees do not dictate the system configurations according to their needs which lead to longer deployments and costly consultant invoices. Thus, organizations should try to leverage as much of the functionality out-of-the- box as they can in order to save time and money in the long run.
Mistake 4: Prioritizing Speed of Deployment
As time is a scarce resource most companies prioritize on the speed of deploying new ERP systems and this can lead to costly errors or even a failed implementation despite the improved ease of deployment with cloud systems. Reports suggest that overly aggressive timelines contribute to poor outcomes. Firms that take the effort to understand how the workflows that are available out-of-the-box can fit their business needs save time in the long run.
Mistake 5: Not Considering Cloud
Analysis reveals that cloud deployments average 69% higher ROI and payback period 33% faster than those deployed on premises. Difference between cloud and on-premises systems is not just in their respective returns and payback but rather how much of a burden they are from a management and maintenance point of view.
Final Words
Any business should ensure that the ERP they install functions to its full capacity and the core functions are fully supported by the system when it goes live. A failed ERP implementation can cripple an organization. Thus the businesses should follow the guidelines and steer away from any of the mistakes stated above in order to have an effective ERP implementation.