ERP implementations aren’t fun. They’re stress filled, laborious, and risky. But ERP is the heart of your business and business data, so when it comes time to replace it, it’s often a necessary move. Like any heart replacement, you only want the best people around to get the job done. Mitigating mistakes in the preparation ‘surgery’, and recovery are critical to keeping things afloat, and you should expect competence.
ERP Upgrades Are Like Surgery—And Need an Experienced Surgeon
Say a research scientist cracks the code and is able to 3D print a heart. Would you want them completing the surgery? No—there’s a wide line between building something and having the surgical skills to put it in place. You also wouldn’t want a surgical resident taking on this critical job. Knowing how to cut someone open and having the refined knowledge to complete a heart replacement are two very different things.
So, why do companies ignore the same in an ERP implementation? Why do many companies trust those who don’t have the tools, team, and/or skills to make this happen? Following our last blog discussing the challenges that go into an implementation and the six criteria you should expect from a partner, we would today like to discuss how a partner mitigates the risk of failure.
Five Reasons ERP Projects Fail
Something we discussed in our extremely popular whitepaper discussing the role that a partner plays in helping your business succeed, if you compare the ERP failure statistics with heart surgery failure, you’d probably take the operating table any day.
“Whether it’s 60 percent or 75 percent failure rate among ERP implementations, the idea of an ERP implementation may sound like a scary prospect for those in the market. Whether these result in damaged reputation, damaged relationships, or legal battles, the media is all too happy to highlight high-profile ERP failures.”
But why are these failures so common? From mismatched partners to mismanaged expectations, here are just a few reasons that an implementation project goes off the rails:
1. The Wrong Software
One of the easiest ways for a project to never get off the ground is for a project to never see completion. Sometimes this is a result of faulty research, other times it’s the result of overzealous, unscrupulous, and/or overly optimistic salespeople.
2. Poor Cultural Fit
ERP projects are invasive—and you need to be able to trust and align with the people implementing your product. A bad cultural fit between internal and external resources can result in people butting heads, morale drains, or other unfortunate results.
3. A Bad Match
It’s not just software, it’s not just culture, it’s experience. Poorly matched customers and partners turn into a partner who is either overwhelmed by the size and scope of the project, overmatched by the industry nuance and necessary work, or oversized, sending out their B- or C-team to do the job.
4. A Lack of Buy-In
Without an executive sponsor and a motivated leadership team, the rest of your staff will follow. Knowing how to sell your executives on ERP often comes down to an ROI justification, and that requires honest numbers to start. If the price sounds too good to be true, it probably is—so the minute that timeframes start extending and budgets climb, your execs might start losing faith in the project.
5. A Failure in Change Management
ERP implementations are significant changes to your business. In fact, many of these projects can push you towards a larger business transformation if handled properly. However, if you’re not investing in the larger change management aspect of the business, people won’t be ready or willing to adapt as the implementation takes place.
Many Ways to Avoid ERP Failure—Learn More in Our Free Guide
If you’re looking to find the right partner to deliver you to a smarter ERP solution, we recently wrote a free resource to help you learn. Reducing ERP Project Risk: Why the Right Partner Matters is our latest whitepaper and explores in much greater detail the above-mentioned failures and the ways your partner can help.
You will learn common reasons why ERP projects fail, errors made during the pre-selection, selection, and implementation process, disadvantages of working with ERP publishers, and important tips for selecting the right partner. Click here to learn more.
Additional ERP Resources
Why Replacing Legacy Systems with a Cloud Solution is Now Mission Critical
How the Cloud Has Made Fast, Thorough ERP Implementations a Reality
Three Reasons Cloud ERP Delivers Security for Your Remote Teams