ERP Implementation Failure: The Good the Bad and the Ugly (part 1)

Why does the fear of ERP implementation failure still plague companies that are out growing their software today?

Go ahead and ask any business if they experienced an ERP implementation failure and you are likely to hear a horrible tale or two. Why has ERP become just another three letter word? Generally, there are three types of experiences with ERP - a successful ERP implementation, an unsuccessful ERP implementation and a runaway implementation.  In other words, it's the GOOD, the BAD and the UGLY.  Let's investigate each scenario to determine whether ERP implementation should be just another feared event or if failure can actually be prevented. Is your business outgrowing your existing business management software or your old legacy ERP?  If so, read on to learn how you can prevent an ERP implementation disaster.

ERP implementations can be like the 3 man show down in Clint Eastwood's "The Good the Bad and The Ugly" movie. If this is before your time, it was released in 1973, you might want to check out one of the most famous scenes in all of movie history.  In order to beat the ERP implementation failure odds, you may need a champion like a Clint Eastwood in your corner.  In this case, this means finding the right ERP consultant.  Click here for Part 2 of this article.

What is Enterprise Resource Planning (ERP) really mean anyway?

It's supposed to be the answer for growing companies. It's supposed to help INTEGRATE all databases into one system.  A successful ERP implementation is a necessary step as a business evolves to allow all of your departments to be connected, for executives and mangers to be in touch with the pulse of the business with real-time dashboards and reports that are effortlessly provided at the touch of a button. Investing in ERP is what smart companies do when they are ready to take their business to the next level. Investing in an ERP system means that you've finally put on your "big boy pants" and are ready to rise up to beat your competitors.

So why to this very day does the threat of an implementation failure prevent businesses from taking such a necessary step?  Well, change is scary and hard. Change is especially scary when there are statistics out there to help reinforce why struggling with your outdated system might just be a better bet. When will a business finally make the choice to make life easier for their employees and help create more happy customers?  Now there's also the decision to stay with an on-premise ERP solution or move to the cloud. All to often, a business will invest in ERP when they absolutely have to and they have no other choice. By the time slow deciders make a choice, sometimes it's too late to recover! It often takes a lot of hard work to get out of this outdated systems mess. Let's see if you are ready to get started.

ERP implementation failure and FINALLY...how to avoid it!

The Gartner Group has been warning businesses for years about the risks of ERP implementation failures. According to Gartner, 75% of all implementations fail.  So what does failure look like and how to avoid it? 

The BAD

• New ERP is a bad fit for our business: Try as you might, sometimes companies just pick the wrong system to replace the old ERP system.  This is usually caused by a lack of a thorough needs assessment and as a result a focused ERP selection process.  Sometimes other influences effect they buying decision that have nothing to do with whether or not the new ERP is a good fit. It's important to have a few people on the ERP selection committee to help with the decision making process. 
• Cutting corners to cut costs:  In an effort to recover ROI from the new system and control costs, sometimes companies cut corners.   This could be in the form of cutting training, or time with the ERP consultant to finish the job.  If your end-users (the people actually working in and relying on the new ERP system) are not adequately trained, you are at risk of having poor adoption and "buy-in" or "user adoption" with the new system. 
• Too much customization vs. out-of the-box functionality:  So let's say you It's very tempting to want your new ERP system to fit your business like a glove. However, with every customization request, you run the risk of increasing the cost and complexity of the project which may quickly cause you to miss go-live deadlines and go over budget.  Also, you need to find out if customizations will easily carry over to future versions and upgrades of your new system.  Instead of customizing your new system, see what can be done with 3rd party solutions or even changing your workflow to accommodate the new system.  Ideally, your new ERP system would not require too much in the form of customizing.  There are those who prefer or need to customize and their are ERP solutions out there that are designed to be highly customized.  
• Lack of support:  Access to get help when you need it. If the ERP publishing company or the ERP consulting company is in a different time zone, make sure you can get access to help when you need it.  
• Lack of training:  Usually, training and continued training over time is the key to a company's overall satisfaction in their ERP investment. Increase your chance for satisfaction by investing in training and don't cut this corner!
• Hired the wrong ERP consultant:  If you are working with an ERP consultant that's usually a good thing.  If you have a feeling your ERP doesn't understand your business, it's time to find someone who does! The right ERP consulting can make all the difference in helping with a successful implementation. If an ERP consultant was part of selling you ERP software without fully understanding your business, that is generally not acceptable among the ERP consultant community where reputations mean so much. A thorough needs assessment by an ERP consultant who is an expert is essential to a successful implementation. 

The UGLY

An ugly ERP implementation is one that has been plagued with run away costs, unsatisfied users and poor adoption rates.  In this case, the new ERP system is up and running  or reports that still can't be accessed. I got a call from a lady the other day who purchased a perfectly fine ERP system. One common thing we hear is that companies will  purchase a new ERP system and it has all the bells and whistles. However, even though the ERP is working, they are so upset because it's taken two years to get up and running and they still don't have the reports they need!  They can't access the right bells and whistles because some corners had to be cut and the new system never got fully implemented to the customer's satisfaction.  Here are 3 common ugly implementation mistakes to avoid. 

• Runaway go live deadline.
• Runaway costs and going over budget. 
• Lack of access to the right information and reports.

The GOOD

In Part 2 of this blog series, we will review what makes up a good implementation so you can prepare for success when you are ready to upgrade your ERP system. Stay tuned...

About ERPVAR:

ERPVAR is committed to providing customers evaluating ERP systems with personal and professional guidance you with your evaluation. Our goal is to enable ERP customers with the right information and the best ERP consulting team to help with your growth goals. Contact us today to benefit from our combined 40 years of ERP industry experience.

Contact us to learn more about a qualified ERP consultant in your area - 888-253-6705!  We look forward to starting a discussion with you.

About Author: Kathy Graham, is a partner and co-founder with over 19 years in working in the ERP community as an ERP partner advocate and channel manager.  It all began with Sage working for 8 years starting in 1997, Avalara for 3 years and Intuit for the last 4 years ending in June 2012. She holds a Bachelor’s Degree in Sociology from Penn State University with a deep analytical and writing background. Her strong ERP VAR relationships, experience, training and commitment to the channel are great assets for customers looking for ERP consultants and ERP partners and ERP solutions to work take their business to the next level.

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