How to Recover from a Failed ERP Implementation
Published: May 14, 2007
Summary: Implementing an ERP solution is more than just a technical process. Whether you are planning an ERP implementation or in the midst of a project gone awry, careful preparation and taking into account the following factors are necessary for success:
It’s no secret that an ERP implementation gone wrong can lead to serious problems for any business. Cost overruns, an inability to meet client requirements and, in the worst case, - damage to client relationships, are just some of the negative side effects caused by a poorly deployed ERP system.
For the most part, the problem isn’t the ERP software itself. According to Ron McCabe, vice president of ERP consulting firm Corporate Renaissance Group, the potentially leading cause of a failed implementation is limited user adoption – the failure to win over the people tasked with using the system on a daily basis. Other causes include improper user training and the quality of third-party support.
In Summary:
| • | Implementing a new ERP solution is both a business and technical process |
| • | Without proper planning and training, migrating to a new ERP system can be a huge change for employees |
| • | The more successful ERP implementations involve working with a partner in tandem with a team of internal experts |
“A company that is having a tough time convincing frontline staff to use its new high-tech ERP system is facing a major catastrophe,” says McCabe. “I’ve seen several companies invest significant resources in various ERP implementations that have failed to takeoff. One of the fundamental reasons for this that I see time and again is a lack of user acceptance.”
Implementing an ERP solution is more than just a technical process. Whether you are planning an ERP implementation or are in the midst of a project gone awry, careful preparation and taking into account the following factors can help lead to success:
On This Page
1) Conform to the system
In many cases, in order to keep employees happy and to maintain the status quo, companies try to make a new ERP system conform to old processes. This practice leads to massive customization of the system – which in turn can lead to inefficient and complex user interfaces, along with costly custom upgrades and maintenance fees.
“Typically, companies try to mirror a lot of processes they currently have as opposed to changing the process completely,” says McCabe. “They strive to get the same processes in place for their staff, which in many cases conflicts with the way the new system is designed to work and leads to unnecessary complexity and user issues.” Instead, companies should look to tailor the new system to be able to accommodate the new functionality status quo.
2) Watch your speed
If the system is implemented too quickly, mistakes can be made and employees may be ill prepared to handle the demands of the new system. This can lead to adoption issues in the long term. The timing for any ERP implementation is crucial and must be realistic. How much time you a lot is dependent on the size of the company and can take anywhere from one month to a year.
“Some people want to do everything in one or two months and underestimate the time it takes for proper development and employee comprehension. On the other side of coin, if the implementation process is open-ended, the project may never be completed,” says McCabe.
3) Training and the phased approach
A new ERP system can often be overwhelming for staff. Indeed, training issues and user comprehension are problems common to many organizations. While adding additional training time is one simple solution, another that is often overlooked is the phased approach.
By rolling out an ERP system in increments, staff can learn to use and accept portions of the system before moving onto additional modules. They can become experts at a basic level and then move on from there.
“Often a failed implementation may result from a company trying to do too much in too little time. Phasing is a cleaner, simpler process that allows users to start with key functionality,” says McCabe. “Implementing an ERP solution all at once can be overwhelming to employees. You can’t take an older employee who’s been doing their books the same way for the past 20 years and throw them into an advanced ERP.”
4) Create an ERP sandbox
Along with training issues, employees may also experience culture shock when migrating to a new ERP system. One of the key benefits of Microsoft’s ERP systems, for example, is that they leverage the look and feel of familiar Microsoft applications like Office. According to McCabe, there are a number of simple ways to increase the benefits from a new ERP system:
| • | Let them play - One of the easiest things a company can do is setup a sandbox, which is a test area on the system that users are free to experiment with. |
| • | Create a bonus system – Employees will be more inclined to adopt a system if you provide them with some incentives, such as developing specific metrics to gauge project success and then linking these metrics directly to performance bonuses. |
| • | Make it measurable – Make sure ERP usage is a part of the employee review process. This will give them goals and objectives to strive for and help them understand that their level of buy-in will have a direct effect on promotions and raises. |
5) Work closely with a partner
Because of the size and scope of most ERP systems, it’s always best to bring in a partner to work with a team of internal experts.
“The problem is that the while the partner is essential for designing and implementing the system properly, they don’t always know enough about your business to make the right decisions,” says McCabe. “The two teams must strive to communicate and collaborate with the best interests of the implementation in mind.”
McCabe stresses that ERP implementations can be seen as overwhelming, making it hard for employees not accustomed to technological change.
“Getting people to accept new processes and systems is probably the biggest challenge with any ERP implementation,” says McCabe. “However, with proper training, most employees will take to a new ERP system once everything is up and running and they start to experience the direct benefits brought on by the solution as a whole.”
Take Action
Looking for a Microsoft Partner? Visitors to the Microsoft Canada Midsize Business Center can take advantage of Microsoft Solution Finder. Use the Solution Finder to learn more about tools developed by Microsoft technology partners that help midsize businesses customer relationships and address your company’s unique needs.
