10 Common Mistakes of Implementing ERP Systems

December 16, 2016 11:30 am Published by Implementing an ERP system is something that most people do only a few times in their career; others make a career out of implementing every day. One of the reasons that companies could put off implementing a new ERP system is because they think it will be hard work, cause a degree of disruption and represent a significant expense. Gartner studies have shown that first time round, buyers think that price is amongst the top three criteria for deciding on a resource planning system. If the belief is that as long as there is no horrific budget over-run the implementation will be a success, then a fixed price contract may seem like the answer, unfortunately it’s this isn’t always the case. A ‘fixed price’ can only be offered if a full project scope has been carried out with all of the major stakeholders involved. To give you a rough idea of how difficult it is for us as suppliers of ERP solutions to supply that information early on, take a look at the white paper, “How Much will my NAV Implementation Cost?” Even with a thorough analysis phase being carried out, requirements can alter during a project. However, with a catalogued Change Control process we can ensure you receive a system that meets your business needs.

10 ways to avoid common ERP implementation mistakes

When you decide to buy a new system, how do you minimise the costs you’re going to incur and maximise the benefits to your business? Here are 10 common implementation challenges you may encounter and ways to avoid them.
  1. Don’t buy ERP software that doesn’t fit in the belief either that you’ll grow into it or it will ‘do’. Don’t waste money buying ‘bigger’ software than you need. A ‘cheaper’ ERP package which seems to have all the functions you need may only have the functionality to support a few users.
  2. Do your best to make your decision on more than the basis of the salesperson you like the most after the first round of meetings. They won’t be in charge of your implementation. You really need to feel you can work with the team that is going to work with you – so ask to meet them.
  3. Don’t be hasty in compiling your shortlist, especially basing it on price alone in the early stages. Ask vendors what process they’ll go through to get as accurate a figure as possible before you sign up. You should be working with the supplier you feel most comfortable with. A reputable vendor will explain how those costs are built up.
  4. Include your key users during the evaluation process. Focus on getting your key users to be involved in the ERP project. I know they have a lot of other things they need to do in the business, but this new system will be the lynchpin of how your business is going to develop in the next 10 years+.
  5. Don’t underestimate the time and quality of resource you need to dedicate to an ERP project. Find someone in your business that you can get to spend 100% of their time on the implementation project. For each day’s time that you pay for from your Vendors, you can get three man days value out of it internally.
  6. Provision contingency. If you provide some leeway in costs in your own head when users realise they needed other functional requirements you can then make a ‘change request’ after go live. However, if you have a carefully scoped project document, this should have been discussed already. Do make sure that what your stakeholders are requesting can be justified in terms of benefits achieved or ROI.
  7. Don’t take on all the responsibility; successful ERP projects need a sponsor at board level. Make your project sponsor responsible for signing change requests and paying invoices
  8. Be a good partner. Communicate regularly with your supplier to ensure the work schedule is being followed. Pay on time if your Vendor is achieving the agreed progress on the project.
  9. Don’t skimp on training. Make sure your superusers can train others on how the ERP solution should work after go-live. They’re the ones that can best inform others how it’s going to work in real life, and the benefits that will be gained by moving to a new system.
  10. Be realistic in your data migration expectations. Only migrate your essential data, as we know that data quickly becomes old and redundant.

How to carry out ERP implementations successfully

The ERP implementations where the client has gone on to grow their business, reduce their costs and increase their profitability often have all of the following characteristics:
  • All of the costs incurred are always within the budget as the project was well scoped and defined from the outset
  • Standard software makes the implementation more straightforward then customisation, and customisation is only included when it brings about obvious business benefits
  • The minimum data required is migrated to get the system going and all of the old customers, products, jobs and suppliers are discarded
  • One person is dedicated 100% to the ERP project – and that person is not the budget controller
  • The Superuser, a person that everyone else respects in the business, is nominated to train the end-users
  • The go-live date is agreed with the Vendors to ensure the end-users are fully briefed and trained on the system
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