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ERP implementation failure can make you lose a lot of money and customers.
ERP implementation failure is one of the worst nightmares of any company. Even prominent companies have suffered ERP failures. Back in 2004, HP suffered losses worth USD 160 million. But ERP disaster doesn’t only cause you to suffer from significant losses. It also makes you lose the trust of your esteemed customers. Have you ever gone through an ERP failure in the past? Whether your answer is yes or no, this article will discuss the most crucial points you should keep in mind if you don’t want to land yourself in trouble.
1. ERP disasters can be avoided by training your employees.
ERP failure is a common issue in companies that don’t train their employees to handle ERP systems. It’s a two-way problem for which both the company and the vendor are to be blamed. Firstly, most companies don’t have a full-fledged IT team, meaning that most of the employees aren’t well versed with complicated ERP software and need training. But due to employee resistance to adopting new technology, they never learn how to operate ERP software in its entirety. It leads to overdependence on the vendor to maintain, update, repair, and operate the ERP software.
Secondly, many organizations, especially the traditional ones, have information silos that prevent the free-flow of critical business information from one department to another. Since employees lack a thorough understanding of the ERP software and aren’t trained to work as a united force, they fail to share the critical data. And lastly, few vendors don’t mention employee training while signing the contract, or they charge exorbitant amounts from the company if the latter wants to train its employees.
2. ERP disasters can be avoided by creating workflows and milestones.
A lot of ERP implementation failures are caused because companies lack a coherent strategy to stick to. ERP implementation is a long, complicated, and expensive process, and all the steps need to be carried out in succession. Employees may face challenges and need to figure out on-the-spot solutions for some of them. They should also be aware of storing multiple copies of data and removing unnecessary files and folders. All of this requires immense patience and understanding on the employee’s part. But the story doesn’t end here. Senior management plays a significant role in making the employee’s journey comfortable and tension-free. They should start by creating workflows that can significantly reduce ERP failures and move forward by designing milestones for small victories and making course-correction strategies to check that they don’t drift from their path.
Start by brainstorming with all the business stakeholders so that your plan considers the challenges faced by everyone. Getting a 360-degree perspective in such matters is critical and reduces the chances of an ERP implementation failure.
3. ERP disasters can be avoided by gathering market knowledge and learning from the mistakes of others.
One of the best ways of avoiding ERP implementation failure is by learning from what others did wrong. As humans, we are hardwired to learn from others’ failures and use our critical thinking skills to avoid the same mistakes. Conduct regular brainstorming sessions with all the business stakeholders and focus on the valuable inputs. ‘Out of the box’ thinking plays a huge role in mitigating ERP failures. Conduct market research analysis by unbiased third-party vendors who will provide you a clear picture of the industry and what your competitors are doing. Next, collect customer-centric information to understand your customers’ needs and build marketing metrics to verify them. Moreover, before implementing an ERP software, understand your needs and create a budget as it will help you decide whether you should go for an on-premise or cloud-enabled ERP software.
From Avon and HP to Revlon and Vodafone, there are numerous cases of ERP implementation failures. But don’t worry because you can manage the ERP implementation process effectively. The three points mentioned in this article will allow you to protect yourself from difficult challenges that are part and parcel of ERP implementation. Read articles, talk with experts, and attend conferences to widen your perspectives. And always remember that knowledge and concrete data can avoid ERP implementation failures. If you keep it in mind, you have already won half the battle.
At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. To know more about it, SMS SAGE to 56767. You can also write to us at firstname.lastname@example.org
Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.
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