ERP solutions are intended to help in the processes of organizations and boost their growth, but an incorrect Implementation can be the cause of many headaches, leading to aborting the Implementation of the solution or leaving it half done.
5 steps to take into account when implementing an ERP.
Identify the problems.
Although an ERP provides a broad solution to many problems that organizations face, it is important to detect where the root of the problem lies. You will be surprised how, in most cases, with process reengineering you can solve problems. If the need for the Implementation of an ERP is still detected, it must be identified if it covers the organization's processes.
An important part is to review the performance indicators (KPI's) of the processes to understand how much an ERP is really required. So, it is essential to identify the problem or need that is leading to the acquisition of a system.
Define the scope.
An ERP can be made up of several modules, but that does not mean that it is necessary to implement all the modules in an organization. We must define which areas we want to focus on first.
It is worth mentioning that the main cause of delays and cost overruns in the Implementation of an ERP is the lack of definition of the organization's needs.
There are many cases of organizations that have had to temporarily or permanently stop the Implementation of a technological tool because the established budget has been exceeded or because it is not what was expected or required. Hence the importance of being very clear about which areas of the organization require ERP.
The acquisition of an ERP must be decided consciously and comparing the different options available on the market, always considering what the organization and the budget need. According to a study by Panorama Consulting Group, 47% of ERP implementations take longer than expected and 37% of ERP projects exceed budget. (The 2020 ERP Report, pages 54 and 59) .
Something that helps a lot in the evaluation of the different options is to make a matrix where each of the tools to be evaluated and the advantages and disadvantages that each one presents are presented: from the costs of implementation, licensing, maintenance, to the ease of adoption. of the new ERP for end users.
Let us remember that the Implementation of an ERP often does not consider the current processes of the organization, or, in the best of cases, it does consider them, but this leads to making several adjustments to them.
Additionally, users may require the system to generate the data they were managing and this could tempt us to migrate all the data that is generated, which is why it is important to define what data is required to be migrated to the new ERP and evaluate whether that ERP has the ability to receive that data.
Having to implement integrations or extensions should be avoided as much as possible, since this increases implementation costs.
According to a study carried out by the Corporate Change Center of Northwestern University (USA), the problems and failures in the implementation of a system are mostly not technical, the 3 main causes are:
- Employee resistance (50%).
- Leadership problems (40%).
- Communication failures (29%).
By seeing this data you can understand why the investment in the Implementation of a new ERP has a much lower return than expected. The main factor in the failure of implementing a new technology is the people.
Let us remember that improving the organization's technology is not a guarantee of success, this is the result of the adoption of the use of that new technology. Hence the importance of executing change management and adoption strategies for the organization.
For any ERP Implementation, you must first identify the problem for which a technological tool is needed and evaluate the options very well, selecting the one that best suits you.
Remember, there is no point in buying a Formula 1 car when what the organization requires is a compact car. Are you thinking of implementing an ERP in your company? Come to us.