Implementing your ERP with success

Why ERP implementations fail

If it seems like there are an abundance of implementation horror stories, this impression isn’t far off. Crowe confirmed that 43% are considered failures; clients cite pain points such as extended timelines, inflated budgets and poor transitions to the new system.

So, what caused these problems? Let’s look at some of the most common factors.

Impersonal, out-of-the-box implementations with generic requirements and functionality can fall short in unexpected ways, although it may not be obvious right away. Your new ERP might have all the features you need, but if it isn’t set up for your unique processes and industry needs, the system won’t be used properly and could be trouble down the road.

Another issue you may run into is a “build-as-we-go” mentality. If your vendor doesn’t see the project holistically from the beginning, your unique business needs may go unnoticed until later, increasing your cost and timeline.

On the other hand, your vendor might do lots of preparatory planning but not adequately consider if it fits the way you do business. This can lead to misalignments over budget, timeline, training and so on. A large portion of project requirements—up to 40%—may not come up until late in the process. Not getting this information upfront can devastate your implementation timetable.

In addition, if end users haven’t been part of testing or training, the cutover may be delayed and bumpy. If the users aren’t comfortable with the new system, they’ll be leaning on your implementation partner for day-to-day technical support out of frustration and need.

Perhaps the greatest friction point in the process is poor communication. Reactive, unresponsive or inconsistent messaging from either party creates an environment of uncertainty—and important issues may not be addressed or resolved because of it.

How to reduce project risk and find success

Now that you know why implementations fail, it’s easier to avoid the risks and make yours into a success story.

• Avoid impersonal, generic requirements from the start. Have your vendor use real-world scenarios within each business area. Document these test cases as examples of how the system will function once you go live. Real-world examples also ensure that the new ERP will adequately support your entire organization.
• Take an active part in planning your implementation; it’s important to keep it running on time. Involve key team members from the beginning: executive decision makers, project team members, subject matter experts, end users and anyone else whom you see as a stakeholder.
• Minimize budget and timeline overruns with an iterative sprint-style approach to development and testing. Before the system goes live, give your employees hands-on keyboard experiences with sample cases. Collect and provide their feedback to the vendor. You’ll give your team a sense of ownership of the new ERP, while you confirm with the vendor that your needs are met as part of the validation phase.
• For a smooth cutover, end users should receive ample training as part of their early hands-on testing. Thoroughly documenting guidelines will make you less reliant on your ERP vendor but also help you onboard new employees. Plan major deadlines around known factors like holidays, team retreats or unrelated projects.
• Finally, encourage proactive, timely communication from both your organization and your implementation partner. This drives consensus and collaboration, uncovers any issues early and escalates them properly for resolution.

Other best practices for your ERP Implementation

Beyond avoiding potential pitfalls, these additional recommendations can keep you on the path to a successful ERP implementation.

• Success starts during the vendor selection process. A true partner will be around to support you before, during and after your solution goes live—something software vendors just looking to upsell technology won’t offer. Make sure they truly know the intricacies of your industry, ask them specific questions during the selection process and check references.
• During planning, get the right tools in place as soon as possible, including project management systems, budget trackers, document retention and anything else that will keep the implementation on track. Don’t forget that this project may absorb up to 25% of your project leads’ and subject matter experts’ time on average—shift workloads accordingly.
• During the actual implementation, prioritize data migration—a pivotal element for efficiency and accuracy. Up to 40% of your technical requirements may not be discovered until late in the process. While your implementation partner should already know this, prepare your team for the possibility of extended timelines.
• Finally, don’t be afraid to go live quickly once your system is viable; you can optimize it and add new functions once it’s up, and you’ll better understand how the ERP works on a day-to-day basis. After you go live, your chosen partner should stick around to help make adjustments and provide reasonable support.

Questions for potential implementation partners

When vetting possible vendors for implementation, ask these questions to determine the best fit for your organization:

• Can you provide references for satisfied clients? Happy clients are always a good sign.
• Can you provide references for dissatisfied clients—situations where the project didn’t go well? An honest response proves they learn from their mistakes.
• Can you provide references for your current implementation clients? If they don’t have any for your exact ERP software, you may want to look elsewhere.
• What are some requirements that are unique to our industry? This verifies their industry knowledge—and that your system won’t be built to another company’s specifications.
• What is our required level of involvement? You want a realistic, transparent answer that doesn’t sugarcoat anyone’s expectations.
• What governance exists to prevent over-customization? This protects you from unnecessary upselling.

Associated Bank supports your operational data needs

The Associated Bank Treasury Management team can assist you with your data requirements. Email Treasury@AssociatedBank.com for more information. To connect with Matt Fisher, our webinar presenter from Crowe LLP, email Matt.Fisher@crowe.com.