13 Common ERP Mistakes and How to Avoid Making Them
Implementing an ERP system is among the most expensive, time-consuming and complicated tasks an IT department can take on. The potential for delays and unexpected expenses lurk around every corner. To help you avoid costly mistakes, CIO.com asked IT executives, ERP vendors and technology consultants to provide advice on how to avoid becoming an ERP horror story.
Tue, March 27, 2012
CIO — Costing anywhere from hundreds of thousands of dollars to millions of dollars, and requiring hundreds of man hours to implement, enterprise resource planning (ERP) systems are huge investments of money, resources and time. And while a successful ERP implementation can help your organization streamline workflow and cut costs, a poorly planned and implemented ERP rollout can severely cost organizations, in terms of lost productivity and delays.
To help ensure your ERP implementation is a success, or at least to minimize potential problems, CIO.com surveyed dozens of ERP experts (IT executives, consultants and ERP vendors), asking them to describe the most common ERP-related mistakes organizations make and how to avoid or solve them. The 13 most commonly cited ERP mistakesand their fixesappear below.
ERP Mistake #1: Poor planning . "Planning is absolutely necessary if you want your ERP project to succeed," says Erik Kaas, vice president of Product Management for Mid-Market ERP products at Sage. "You simply can't wing ERP."
Kevin Beasley, CIO ofVAI, a provider of ERP software and solutions to mid-market and enterprise-level organizations, agrees. "Many organizations do not do enough up-front planning before they begin an ERP software evaluation," he says. "This often leads to confusion down the road because they might not fully understand their current processes and how to evolve them to maximize business benefits and efficiencies."
To solve this problem, organizations should conduct an internal audit of all of their processes and policies before choosing an ERP system. In addition, Beasley recommends putting together an ERP evaluation team composed of stakeholders from across the business. And, if you feel you do not have the in-house capability to properly evaluate ERP systems, consider hiring an experienced third-party, vendor-neutral consultant, who has experience implementing ERP solutions at companies in your industry.
ERP Mistake #2: Not properly vetting ERP vendors. "Many of my best clients are 'sold' by the [vendor's] marketing team; however once the implementation is complete they are surprised by system functionality restrictions, lack of capabilities, and the impact on existing internal best practices," says Shawn Casemore, president, Casemore & Co., which helps clients improve their operational performance. His advice: Always ask for references. Request the names of at least three companies "who are in your business sector, who you can contact and discuss the software with, then call and discuss features, functionality, and challenges," he says. If the vendor can't (or won't) provide at least three names? "Walk away," unless you want to be a guinea pig.