For a small to mid-size businesses, such as a manufacturer or distributor, an enterprise
resource planning (ERP) system implementation can cost upwards of $50,000, and
hundreds of man hours to implement. Considering that, it’s important that the
implementation is done the right way the first time, making sure that your business
processes are streamlined, workflow systemized and automated, and operating costs reduced.
If it’s not, it can cost your organization profitability, and lead to hours of
pull-your-hair-out frustration.
While reading a great article on ERP Software mistakes and how to avoid
them, I thought it would be a great opportunity to write our own blog post on
the same subject for our readers. The below 12 mistakes help you, the CIO, CEO, COO
or CFO to help your company make the right decision on choosing your ERP software provider and business software solutions partner, and what to expect
from them.
ERP Software Mistake #1: Poor planning. Just like with any
major milestone in life or in business, planning is essential. You can’t just
throw in any old ERP software package and hope for the best. The first part of planning
is a thorough review of the business processes you currently have. Armed with that
information, you can understand what is and what isn’t working for your business, what
you would like to automate, and what you would like to outsource.
At The Attivo Group, Inc.:
1.
Our very first step to planning is completing a
business process analysis. We learn your processes, pains, and where money
seems to be seeping out of your business.
2.
Working with you, we arrive at solutions that can streamline
and automate the processes, cutting costs and time spent.
3.
Lastly, we train your staff on the new processes so that
your business doesn’t just have new software, but a better way to do business.
ERP Software Mistake #2: Not properly vetting ERP vendors. Do
you go and buy a new car without reviewing a single consumer report? Why would
it be any different for when you’re selecting an ERP vendor? Ask for at least 3
references for any service provider before signing a contract – including yourERP software implementation partner.
ERP Software Mistake #3: Not understanding or using key features.
ERP software has amazing capabilities, but that doesn’t mean you need to
become an expert on the software your company uses – just an expert on what you
need your ERP software to do. With understanding your needs, a good ERP implementation partner will be able to help you automate business processes, complete functions faster
and meet business objectives. It’s important that your ERP implementation partner also offers
training and on-going support to help you through upgrades, track usage, and
offer yearly reviews that reviews the features being used and which can be the most
helpful.
ERP Software Mistake #4: Underestimating the time and resources
required. Let’s be honest, ERP software implementation can take some
serious manhours. The simplest way to tell how many manhours a software will
take is to take the cost of the ERP software and divide by 100. It’s not the
best estimate, but it gets you around the ball-park figure. However, that’s
only if you’re going to be using an experienced ERP implementation partner. If you’re using an
in-house IT person, you’ll need to at least double or triple that number.
To help reduce this time, it’s important that the company dedicates a
project manager for the ERP implementation.
ERP Software Mistake #5: Not having the right people on the team
from the start. Once you make the decision on an ERP software implementation partner,
you need to start involving all future major users of the software involved –
not just IT. This includes key people from finance, operations, manufacturing,
purchasing and warehouse management. Each department is going to have a
different set of requirements, and to help save time and reduce mistakes that
can derail an ERP implementation; their input will insure their support and
success of the new system.
ERP Software Mistake #6: Not setting priorities. Have you
ever read and replied to emails while on a conference call? Didn’t work all
that well, did it? You might have gotten the gist of the conversation, but not
the specifics, and in the end you might have asked for someone to repeat
something in-order to respond. The same is true for an ERP system
implementation.
"When implementing an ERP system, the single most important thing one
can do to minimize delays and accelerate time to completion is to reduce
multitasking," says Yoav Ziv, vice president, Realization , a project
management specialist. "People work much slower when they are juggling
multiple tasks and constantly switching gears," he argues. Therefore,
creating a priority system should be a top priority for IT managers. "The
priority system should not only indicate when to do which tasks, but should
also provide managers with the issues they need to resolve, per priority,"
he says. In addition, "ERP implementation managers need to implement a
rigorous issue resolution process to act upon those signals and remove issues
immediately in order to avoid delays."
ERP Software Mistake #7: Not investing in training and change
management. An ERP system is not going to be totally intuitive, so ERP training
is a key investment in a successful ERP implementation. Any lack of training
will result in misinformation, misuse and a general sense of frustration among
your employees. Plus, it’s not going to happen after one training session. It’s
important to be open to questions and re-training to insure a favorable
outcome.
ERP Software Mistake #8: Underestimating the importance of accurate
data. Mind reading has not been implemented in ERP software packages, so it is important that
proper programming and procedural parameters are put in place in the beginning to
minimize the likelihood of errors.
ERP Software Mistake #9: Taking the kitchen sink approach. ERP
software cannot do everything, no matter how flexible, powerful or expensive.
This is where planning, assessments and prioritizing process automation is
important. If you try to make your ERP software to run your entire business,
you’ll be sorely disappointed. However, there are many applications that can run
seamlessly with each other, so although data may not be all stored in the same
software, the data can ‘talk’ to each other seamlessly.
ERP Software Mistake #10: Not decommissioning legacy applications.
Trying to reduce cost and waste? Then one important rule of thumb for
implementing new ERP software is to plan the decommission of legacy applications
during implementation. There’s no need to move over all the original legacy
applications that you need to upgrade and interface with your new ERP system.
ERP Software Mistake #11: Not having an active testing
environment . A few users will not give you an accurate picture
of real-world of using this new system – you need an active load testing
environment that allows your staff to actively use it. This will help in
avoiding unplanned downtime and a smoother transition.
ERP Software Mistake #12: Not having a maintenance strategy.
This not only speaks to the on-going support of an ERP software support organization, but
also from the upgrades and software maintenance. Cloud based solutions are
great for insuring that upgrades and maintenance is maintained.
Have an ERP software implementation issue or solution not covered above that you would like
to share? Please leave a comment.