Why ERP implementations fail?
Someone the other day threw this one liner towards me. I was delivering a brief lecture on important points to be kept in mind during ERP implementations. I knew this was going to come and I had prepared well for this question. But taking this question right in the beginning, probably that was not I had planned. So I politely asked the person in the audience to leave this question for the time being and promised to take it up at the end. I knew that once I am over with my talk, the audience would get their reply.
But the gentleman was unrelenting. His logic was that this question is required to be addressed right in the beginning as its answer only would set the tone for further discussions. I took it up gamely and thought now that I have been thrown in a situation like this I should reply to the gentleman first. I am reproducing my answer here. Top three reasons are listed here.
- Selection of vendor and consultant to aid the implementation process: This is the most important step and determines whether the effort will bear fruits or not. It is not mandatory to appoint only Tier I vendors for implementations. Tier II vendors are equally good. Important thing is to study and assess the capabilities of ERP implementors and their experience in executing ERP implementaions in similar domains. It is true that even in the same domain, no two oganizations are alike, yet having implemented an ERP solution in the same domain gives confidence to the consultant, vendor as well as the owner.
- Change Management:This is the probably most important point. Organizations have be made ready to accept the change. And this requires lots of offline work. ERP implementation it is said is 50% offline and 50% online. Every important link in the organization hierarchy has to understand the importance of ERP. The ones who are most vocal and offer maximum resistance to ERP implementation are the best enablers for the organizations for smoother ERP rollouts. These persons are to be monitored and are required to be given important roles.
- Unflinching support of TOP MANAGEMENT: Top management and board of directors has to take the responsibility and offer unflinching support, with dispute resolution being planned abd taken up through a structured approach.
The top three points mentioned here are not the only points which can derail a smooth implementation roll-out. There are other points as well. But it has been observed that the top reasons for ERP failures are these three only. Every smooth ERP implementation has one failure behind it. But it is not imperative that ERP has to fail once for it to succeed.
May also like to read: Approaches in ERP implementations
Searching for this for some time now, Thank you.
Thank you for writing this, I can not find an information which is so clear and through up to now. Erp, customer relationship management are my favourites, please check.