Today I came across a blog post by Jason Rourke on the Top 5 Reasons ERP Implementations Fail (http://it.toolbox.com/blogs/navigating-erp/5-reasons-why-erp-implementations-fail-45667). I’ll list the 5 he cites below – all of which are completely valid, and I’ll let you go to his post through the link above for his explanation of them:
5) Don’t “Train the Trainer”
4) Underestimating Implementation Days Needed
3) Resistance to Change
2) Choosing the Wrong Solution
1) Management Doesn’t Buy-in and People Aren’t Held Accountable
These are valuable because it always pays to learn from the mistakes of others in order to avoid making them yourself. But I would like to counter with the Top 5 Secrets to a Successful ERP Implementation:
1. Establish a baseline, set goals and quantify the business benefits resulting from the implementation of ERP. This is actually 3 secrets and 3 different steps that go hand-in-hand. I suppose you could establish a baseline and quantify the results without setting goals, but you’ll get better results if you do. But those that do getter better results. End of story. So set those goals – and make them aggressive! The phrase “you can’t manage what you don’t measure” is perhaps over-used in some circles, but not when it comes to ERP. I’ve lost track of the number of times I have asked those that have implemented ERP to identify specific business benefits that have been quantified by the implementation of ERP and encountered silence. Manufacturers do a better job of this than other industries because everyone measures inventory and most measure the performance of complete and on-time shipments – 2 metrics on which ERP has a direct impact. Eventually those with successful implementations come up with an answer, but it is not on the tip of their tongue. That tells me they could be getting more value.
4. Spend as much time and attention getting information out as you do getting data in. The goal of an ERP implementation is often to provide added visibility to the business. Yet many sit on mountains of data and still have limited visibility. Perhaps this is why one of the trends today is to build business intelligence and analytics into the application instead of relying on separate IT tools. But this does no good if you ignore them. And put them directly in the hands of the decision makers. In today’s mobile society, that probably means making them available on whatever mobile device your executives decide is their lifeline to the business.
5. Never consider an ERP implementation as “done.” Yes you achieve milestones; yes you go live. Many are so relieved to hit that first go-live date, or even the second or the third… that they simply go back to their “day job” and figure they are done. But your ERP solution provider continues to enhance the product and your business will continue to change. So don’t let your maintenance dollars go to waste and constantly evaluate current processes in the context of your implementation. Continue to broaden and deepen your usage and apply continuous improvement concepts to ERP just as you should to your operation.
Of course there are others – most of which are the exact opposite of Jason’s reasons for failure – like picking the solution with the best fit, getting management commitment, providing adequate training and managing change. But they will only take you so far without the 5 reasons above – don’t keep them secret in your organization!