Biggest Challenges of an ERP Implementation

ERP stands for Enterprise Resource Planning. It is a software that incorporates the latest technology to integrate different processes of a company.
Biggest Challenges of an ERP Implementation

Challenges in ERP Implementation

ERP stands for Enterprise Resource Planning. It is a software that incorporates the latest technology to integrate different processes of a company.

The different processes that an organization has are Finance, Human Resources, Marketing, Procurement, Planning, Production, and more, depending on exact business.

ERP implementation is not that easy! The decision to switch to an ERP system may take several months or even years, and requires lot of accurate  customized training   - see for example the  SAP Implementation steps   for that matters, which are applicable to other solutions.

ERP serves as the central nervous system for your organization that provides real-time reports to higher management.

However, if not implemented correctly, ERP may lead an organization to face financial and non-financial loss. Some of the common challenges faced by different organizations during ERP implementation are:

1.Choosing the Right software:

ERP companies have many solutions to offer to their customers. This is the major and most common challenge faced by almost every organization. It is the first step in transforming your business into a new system.

Lack of knowledge about current technologies lead to a waste of time and money. There are hundreds of solutions available in the market. Organizations need to understand which is the best one that fits their needs in terms of size and scope of systems.

The best solution to overcome this problem is to look at other firms of the same size in your industry, what software they are using, how long they have been using that software, but also to look at other  ERP implementation failure   to take an informed decision.

2.Full Knowledge about the processes of the company:

There have been instances where ERP software companies are not briefed properly about the processes of the company. ERP implementation is a costly process and consumes huge financial resources.

Software companies also allocate their resources to develop the best ERP system, but sometimes, even when everything is ready, the company finds out they missed one of the core business tasks to include in the ERP system.

At that time companies find themselves in hot water because there is no other choice than to revise the whole project once again, or even revert to previous system. It takes time for developers and also puts extra burden for the client company to pay extra for any additional task.

It is therefore important for companies to arrange meetings with their managers before the project starts. This way developers get full knowledge of the process about what's happening in the company and how they must address the issues in the best possible way.

3.No Prior Knowledge of ERP:

Many managers in a company don't even have prior knowledge about what is an ERP. This lack of knowledge leads to create differences between them and developers. Sometimes they misunderstand the ERP implementation and even the best solution for their company's operations.

They opt to go for ERP even when they can achieve the same result from just a simple software. During this situation it is in the best interest of project managers, and for the companies, to downscale the project.

They can advise them what is best for them and if ERP is either suitable or not. Most of the time this happens when companies don't have IT specialists in their companies or their IT manager is incompetent to guide them properly.

This, in turn, leads to  ERP implementation failure   in technical training as well because of the very technical nature of ERP.

However, even if that is one of the main key issues in ERP implementation, it can easily be solved by getting  customized training   online tailored to your needs – and the ones of your whole team or company.

Corporate online SAP training package

4. Company Involvement:

While having trained managers and implementation team is a core ingredient of a successful ERP implementation, ensuring that the whole team that will have to use the product, and not only the key users, are properly trained, on time, and at their pace, is of extreme importance.

What is the biggest challenge with ERP systems? People skills

Most of the ERP risks and challenges are actually associated with people that don’t have a direct impact on the project, but that haven’t been trained at all, and an indirect lack of knowledge leads them to take decisions that do not take the big picture into account, and that might have collateral damage on the core implement project.

Therefore, it is of utmost important to get  customized training   packages for the whole corporation, that they can all access at their own pace, and to make sure that the right resources are recruited in the first place, by using recruiting platforms such as the   international job portal.

How to ensure your ERP implementation will succeed?

While there is no sure way to ensure success of an ERP implementation, is follow the right implementation process, such as the  SAP Implementation steps   for instance.

These steps will really help challenges of erp implementation. Based on them, perform the necessary algorithm of actions.

Focus on business and requirements, Reasonable return on investment, Clear project management, Management support, Advance planning, Thorough preparation for change

These tips are especially relevant if people don't understand how to use the software effectively. Functional training must be focused on optimizing your business, on technical innovations and of course on profit.

Also, before starting the project, make sure that the team is correctly staffed, and that  customized training   has been provided to the whole team, even if possible with more than what's necessary, to create synergies between departments and upskill all project participants.

Biggest challenges of an ERP implementation: Stephanie Snaith, Managing Director, Gradient Consulting

A lot is made of risk management in any project, particularly one to implement an ERP system. An ERP implementation will impact pretty much the whole business, with associated issues in terms of roles, processes, data, etc. As a result, I think there are two, but inter-related, “biggest” challenges – that of change management and leadership.

From experience, any company that neglects or pays lip-service to either of these has a project doomed to failure. Assuming an ERP is designed to deliver business improvement (if not, then I would question what the point was, but that is a different story), then business, as usual, is not an option. Ok, what does this mean? The project needs to be driven from the top but involving a broad a cross-section of the overall workforce as possible. Right from the start, consider how things will change – for instance, the manual processes might be eliminated – this is someone’s role in the business, and they will quickly work out that their job might disappear.

It's not about having all of the answers upfront, but it is about a level of openness and honesty in communications, delivered by engaged senior management who can articulate what the future might look like.

Stephanie Snaith, Managing Director, Gradient Consulting
Stephanie Snaith, Managing Director, Gradient Consulting
Stephanie Snaith, Managing Director, Gradient Consulting
Originally a trained CIMA accountant working in industry, Stephanie formed Gradient in 1997 after running various projects which identified the need for ERP project expertise. During that time, she has enjoyed working with a broad cross-section of companies selecting and implementing systems that have resulted in real business benefit.

Frequently Asked Questions

How to solve the challenges in ERP implementation with the choice of the right software?
The best solution to overcome this problem is to look at other firms of the same size in your industry, what software they use, how long they use that software, and also look at other firms.
What are some of the major challenges faced during ERP implementation?
Major challenges in ERP implementation include managing change, aligning business processes, data migration, user training, and ensuring ongoing support and system updates.

Comments (2)

 2020-10-07 -  Freedom Software
Excellent article sur l'implémentation ERP. Ce sont les facteurs à considérer avant de se lancer dans un système ERP. Très bien expliqué sur ses défis. Merci pour le partage.
 2021-07-17 -  Mamta Sharma
The concept of Enterprise resource planning systems came into existence for eliminating inefficiencies and miscommunication-related issues in organizations. The old inefficient processes are also evolved during the analysis because an ERP designed to perform inefficient processes will still be inefficient. However, decision-makers feel overwhelmed by dazzling new features offered by different ERP solution providers which often leads them to make wrong decisions on vague fundamentals.

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