These are the challenges in ERP implementation that businesses have to go through
1. Clear business objective – The first leap toward successful ERP implementation is to define clear objectives that should be achieved through the implementation. In other word, what will be called success should be predefined. Absence of clear objective may lead to vision match problem and finally lead to a failure. Objectives are also helpful, in setting priorities and deciding trade off in case of conflicting interests among the stake holders.
2. Management Backing – ERP impacts almost every nook and corner of the company either direct or indirect. In such scenario, it is obvious that ERP implementation team may face some resistance, pressure from all stakeholder. There may be resistance to change, fear about new system and discomfort about leaving the old habits and thinking. There must be a clear message, encouragement, motivation from management towards the support for the implementation. This will soothe the resistance. Management should make it clear to the stake holders this the priority for the management. Otherwise project team will succumbed under pressure from all direction. This is the most critical point which may set or break the game.
3. Lack of standard business practice – Organization should not attempt for ERP unless they have a standard business practice. This is another common mistake that SMEs usually make. Before beginning the ERP selection process, business process of the organization should be in place. In absence of a standard business process, ERP software has to be customized heavily and it will have impact on time and money of the organization. Though a little customization is always favoured, as every organization generally has some specific process (which may be their core of differentiation from others) and ERP vendor should cater those differentiation in their package to fit to close the client environment. But this customization should be very specific and limited one. It should be very controlled and should not go beyond a limit otherwise whole project will move into a different trajectory.
4. Team formation & trust building – Challenges are bound to come during implementation. With proper trust and team work, it is most likely that implementation team can overcome all challenges.
5. Lack of ownership & active participation – Not everyone in organization likes to take lead in change and some people try to elude from this under the pretend to preoccupied with their business and derail the whole implementation. So ownership and active participation a one of the most important key for successful implementation.
6. Scope creep – Most of the people suffers from shopping cart mentality while implementing ERP. They try to fill their cart(ERP) by every thought they come across during the implementation and avoid attention to priorities in this process and give importance to less important stuffs. The recommended idea is to focus on vital essential issues first. Once you are done then move on to other stuffs. Hitting so many post at the same time will leave you nowhere.
7. Computer literacy – In Indian working environment, still we encounter some organization, where computer literacy is problem in some of their dept. An computer illiterate dept may dent your investment. In this case proper training should be provided to those user, so that they can participate actively.
8. Incomplete and incorrect data – Garbage in, garbage out. This early day phrase is still relevant today. Most of the executives don’t care too much or put required effort to collect complete and correct data. Just imagine what will the worth of any ERP system with garbage data. Eventually people will lose their faith and whole system will die.
9. Relaxed milestone & deadline – Relaxed milestone is sin for implementation. If people don’t pay proper heed to deadline, then it’s a sure recipe for failure. If milestone slips too often, people will take it for granted and this scenario will grip the whole team and organization have to toil hard to complete it which results in ERP implementation failure.
10. Implementation process – is collective experience of any ERP vendor and which suggests what works and what don’t in any implementation. A standard implementation plan is tailed by ERP vendor to closely fit clients requirement. Proper care and honour must be given to it for successful implementation. No organization should proceed in absence of any implementation process.
11. Software Functionality – Not all manufacturing companies are same. Some are in process industry, some are in engineering, some may be in chemical, textile, automobile and so on. So are the ERP. A production module for engineering company can’t suit for a process industry. So proper care must be given to functionality of ERP while selecting one. A misfit functional ERP will lead for ongoing customization requirement and will trouble all stakeholder.
12. Insufficient funding – Proper budget should be allotted for project. Budget should include all direct and indirect expenses.
Now you know the basic challenges in ERP implementation. Know more about ERP by reading our articles
Check What is ERP, types of ERP modules & benefits of ERP