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Top Reasons Why ERP Implementations Fail

Tuesday, 11 February 2020, 12:23 Hrs

Often referred to as the backbone or central nervous system of an organization, ERP (Enterprise Resource Planning) plays a vital role in the management of business processes. A collection of integrated applications to assemble, accumulate, and administer vast volumes of data in a single database, ERP brings in each and every department into a single system. Handling everything starting from accounting, HR, customer management, to supply chain and sales under a sole platform, ERP plays a critical role in the sustenance of business in the market.

However, most of the times ERP implementations fail in an enterprise while dealing with complex projects due to lack of knowledge and experience of ERP implementation. Some of the below-mentioned points highlight the common reasons for failure for ERP implementation, which can be avoided if taken care of:

  • No Pre-Determined Goals: Most of the business enterprises do not properly understand the role of ERP and implement it without any proper specifications such as the proper estimations of accomplishments and profit measurements. This failure in setting a predefined goal prevents the company to acquire one customized ERP application, specifically designed to favour the business transactions of the organization.
  • Choosing the Wrong Software: One of the major yet common mistakes of ERP implementation, choosing the wrong or improper software to maintain the ERP can be a major drawback. Just because particular software works better for one business organization, it not at all means that it will also work perfectly for you. Based on the business requirements and the goals to be achieved, the software should be selected and scrutinized beforehand.
  • Scarcity of Resources: Limited budget might affect the flexibility of an organization. Sometimes after getting the ERP applications implemented at an affordable price, the organization fails to carry forward the further process and procedures of ERP due to financial constraints. A proper budget planning before the ERP implementation about changing and upgrading it as and when required will prevent failures in future.
  • Lack of Communication: Sometimes the misalignment of information exchange leads to the failure in ERP implementation. As a result of inadequate communication between the various departments operating and functioning through ERP hinders the main objective of the project. By ensuring a continuous flow of the information the transparency in the project execution can be maintained preventing any kind of confusion or miscommunication.
  • Improper Process Mapping: For an ERP to map the progression and process of the organization is one of the crucial factors. While going for ERP implementation, evaluate, analyze, and state the areas for optimization before they are finally mapped into the ERP. As it will be highly economic to remodel any kind of changes into the workflows. Hence it is always advised to go for a well planned, customized and thoroughly tested ERP for getting optimum benefits out of it.
  • Insufficient Training/Support/Testing: If the end-users are not properly trained in using the ERP, this might lead to considerable failure of ERP. While going for implementation of ERP applications, it should be tested thoroughly. The major objective of testing is not to see whether the software works or not, but to see up to what extent of the requirement criteria is getting fulfilled.