Three Common ERP Mistakes
If you have ever been involved in an ERP project, you are probably cringing just thinking about it. An ERP investment is one of the most resource intensive investments a company will make. If the right planning and decision making happens, a company can see excellent results and a great ROI. However, due to the complex nature of ERP research, the buying cycle, not to mention the actual implementation processes, there are several common ERP mistakes that are usually made. Any mistake made can severely impede on the success of an implementation. Here are three common ERP mistakes organizations make during their implementation process.
- Failing to fully understand the needs of your business. Like with every product, there are hundreds of options when it comes to ERP systems. Each product on the market has different features and functionality, not to mention various cost levels also. Each vendor offers their own type of support, ranging from 1 option to various support levels. This combination of items can be overwhelming when it comes to picking just 1 system for your business. The best place to start is to begin whittling down the choices available. The first step should be speaking to individuals within your business, focusing on a variety of positions and levels, so you can gain an understanding of exactly what problems your new ERP system will need to reconcile. Once you have a list of your organization’s needs, you can narrow down the search to a few vendors that offer solutions that match your needs. This really should be the first step you take once you decide to upgrade your ERP system. Putting off this step until after you have selected and implemented a system is a big reason ERP projects fail. This causes you to try to change your business model to fit within your ERP system, instead of choosing an ERP system that works best with your business model and processes.
- Failing to properly evaluate vendors. Once you have narrowed down vendors based on your business needs, you need to try to further vet the list. First thing to consider is the location of the vendor and their implementation team. Many vendors charge you travel expenses, which can add a significant amount of money to an already expensive project. Not to mention the fact that anytime in the future you need their assistance, you need to wait for them to travel to you and the expense associated with that again. After you eliminate vendors based on location, you should then evaluate them based on their experience. Experience can range from how much industry knowledge they hold to how long they have been in the ERP business. This selection criteria can ensure the vendor you select will work as efficiently as possible and will have the tenure to avoid rookie mistakes, which can cost you both valuable time and money.
- Underbudgeting time and/or money. ERP projects can cost a business hundred of thousands of dollars. Large implementations can be upward to a million dollars. That is a substantial investment to any business. Time is the other substantial investment made. You need to consider and understand how long it takes to get the system running efficiently. This process can take six months or more, depending on the complexity of the situation. Those who fail to understand the amount of time needed for an effective ERP implementation will likely have unrealistic expectations, which can lead to a failed implementation. You need to go into an ERP implementation with appropriate expectations on the amount of resources needed to upgrade your system if you are going to be successful.
It is true these 3 are the most common mistakes made with ERP implementation, but that does not mean they have to happen to you. Learn from the points above and take them into consideration before you begin planning for your next ERP project. By pinpointing your organization’s needs, properly analyzing and selecting your vendor, and understanding the amount of resources that are required, your ERP implementation process can go very smoothly. 2W Tech is a Certified Epicor Consultant and would be happy to discuss if we fit with what you are looking for in a vendor and erp solution.