Avoid these common mistakes often associated with ERP initiatives
By Jignesh Mistry and Vishal Adheda
Since its inception in the late 70’s, ERP implementation has been a daunting task. From SMBs to enterprise companies these undertakings have pained executives year after year, often resulting in large capital expenditures with no tangible ROI.
To harness the full power of ERP, here are some critical components to have in place:
- Have a clear understanding of company needs:
Selecting an ERP solution based on short-term goals is a recipe for disaster. It is imperative that business leaders understand the unique needs and requirements of the business now and for the future. Performing a detailed analysis of functionality, flexibility and features will give insight into how the ERP system aligns with the organization’s processes and goals. A thorough analysis will also reveal any gaps in AS-IS and TO-BE process mapping
2. Involve actual end-users in the research process:
Don’t make the mistake of benching the people who will eventually become key users. Include these important stakeholders in the research process to create a sense of ownership in the project and its outcomes.
3. Ensure pre- and post-implementation governance:
Keep financial decisions and accountability for user adoption and performance with the steering committee. Call on your leadership to help stomp out confusion and beat back interference from competing initiatives.
4. Enlist competent project managers:
Select your ERP project manager carefully to ensure alignment of skills and vision. Let the PM take the helm of the process from the very beginning. Sadly, decisions are often made without the project manager’s knowledge, including final decisions about the solution. Once again, this mistake will result in little or no sense of project ownership.
5. Apply business process modeling:
This is a critical step in the process as it ensures that no business process or planned improvement remains undocumented. The current state (AS-IS) is influenced by existing users because they are most familiar with the process. Thorough documentation removes dependencies from specific business functions and a well-documented process provides clarity to the implementation teams. More emphasis on this phase can lead to increased efficiencies in a future state (TO-BE).
6. Document Standard Operating Procedures (SOP):
During most ERP implementations, the perceived value for SOPs is slim to nil. However, it’s worth thinking it through to realize the full value of your new system. SOPs help sustain routine processes which can then be automated in the new ERP system. Organizations with high turnover rates will benefit most from this exercise as it helps transition new employees into their roles faster.
7. Decommission legacy applications:
We’ve experienced instances of legacy systems lingering long after the new one is in place. In some cases, multiple systems are in use simultaneously, resulting in increased anxiety about switching to the new tool and swelling maintenance and support costs. Just let it go!
ERP systems provide an integrated view of how an organization gets things done and helps them identify ways to improve upon processes including automation. Companies that consider these seven best practices will achieve greater implementation success and realize more value from their ERP implementations.