If you rely on a patchwork of systems to manage workflows and users across your organization, business process management can be a big source of frustration.
Do you have one program to manage your accounting needs? Another to handle customer relationship management (CRM)? Something else for inventory management? Do you have one or two people who hold the mental keys for all the knowledge about how everything works together?
This is reality for many organizations — an interconnected jumble of hodge-podge disparate systems, siloed knowledge, ever-changing technology, and employees that come, go, and shift around within your company.
When someone announces, “I’ve got a solution to handle all your needs!” your ears may perk up and you’re ready to dash off toward better days. It sounds great (and it really is) — one platform to automate vital processes and make your day-to-day business management run more efficiently.
When you’re presented with something feature-rich that could change the way you do business, it’s not hard to rush off after it. But when it comes to adopting an enterprise resource planning (ERP) solution, the challenge begins with actively analyzing your needs, then preparing for, choosing, and successfully implementing the right ERP for your needs.
So where do you begin?
Here are 8 challenges businesses face when choosing and implementing an ERP. Read on to learn how you can overcome some of the common missteps that can cost your company time and money, and derail your successful ERP adoption.
Challenge 1: Not a Good Starting Point
First, ERP selection and implementation hinges on strategy. That’s because without a well thought-out plan and approach, you may stumble over organizational problems or people-related issues, and miss aligning today’s processes with tomorrow’s needs.
When you’re thinking about adopting an ERP, it’s important to include an analysis of all of your existing business processes so you can better understand the scope of your ERP needs.
Don’t just think about existing processes as they function for your company today. ERP adoption is a great time to take a closer look at these processes, determine what works well, what can work better, and what your future needs may look like. If you have a process that doesn’t work well now and then you automate it with your ERP implementation, you’re not going to get the most out of what your ERP can offer. This evaluation can create opportunities to improve or change your existing workflows.
It’s also important at this early stage to look at all the critical software, systems, and applications that your organization needs to operate. What are your existing sticking points or problems? How can they be resolved with your ERP implementation? Remember, it’s important that all issues that may affect business-critical operations be assessed prior to choosing and implementing your new ERP.
Does your ERP solution seamlessly integrate with your existing business operations? Will it integrate with your sales program? Will it work with your accounting systems? Will it replace those other solutions altogether?
Did you know that 80% of respondents from a Technology Evaluation Centers (TEC) survey said that ensuring the right fit of the ERP to business needs is often overlooked? That could mean that at the end of your implementation phase you may find yourself with an ERP that only meets some of your needs. Be sure to take the time up front to analyze all your operational needs and goals, map them out, and include them in a list of requirements before selecting your ERP vendor.
Challenge #2: Selecting the Right Vendor
After you’ve analyzed your business processes and needs and created a requirements list, it’s time to evaluate potential vendors against your ERP goals.
In that TEC survey we mentioned, 50% of respondents said that poor choice in selecting an implementation partner is a key reason why ERP implementations fail. That’s why it’s important to carefully select an ERP partner who will work closely with your team throughout the evaluation and implementation process — one that will proactively evaluate your goals and objectives and suggest plans and processes that will have positive impacts on your operations.
Here are a few questions you can ask:
- How many similar projects have you successfully implemented?
- What are some of the common issues you’ve encountered and how can we proactively address them before we get started?
- What types of industries do you serve?
- Could you tell me a little more about your scope of experience?
- What does your pricing criteria look like and what’s included?
- What are some of your ERP’s core features and how do they apply to my business needs?
Challenge #3: Business Silos and Communication Issues
When assigned the task of choosing and guiding an ERP implementation, it’s fairly common for teams to start at the top with executive-level buy-in. But what about mid-level managers and employees responsible for the day-to-day tasks directly related to your ERP processes?
While executive-level and key stakeholder buy-in is important (they can stronger influence company-wide understanding and adoption), don’t forget about how important it is to get involved with key employees who will use the system the most. Engage with them as early — and as frequently — as possible.
Once you’ve identified these key players, create a communication plan. Make sure all employees know about your ERP goals and take the time to engage with them so they understand how their individual roles are directly connected to company success.
If your company is too large for one person to handle all communication about your ERP plans and progress, create a small communications team that represents different departments throughout various parts of your organization (don’t forget about different geolocations, if applicable). Empower them to help tell your ERP story throughout your company.
Work with your core team to keep them up-to-date throughout the process and be sure they know it’s important (and their responsibility) to share that information — including progress, milestones, challenges, and setbacks — with their related teams. Always be sure these communication plans include the people who will be most affected by ERP implementation and adoption.
Don’t forget to create ways for your employees to give you feedback throughout the process. Be open to accepting suggestions, criticisms, and improvements, especially from those who will routinely use the system.
Challenge #4: Insufficient Budgeting
When budgeting for ERP implementation, there are a number of factors that could increase the scope of work and ultimately the final cost for your project. If your ERP system is out-of-the-box and meets all of your needs, you may need less wiggle room in your budget than for a system that requires a lot of customization to meet your needs. Remember that requirement list we mentioned in Challenge #1? The better you field that list and the better you evaluate your vendors against it (Challenge #2), the more successful you may be in curbing unexpected costs.
Also, don’t forget that most new systems require some level of upkeep and maintenance. Don’t let those extra costs slip away from you when you’re budgeting for a new system. Learn more about estimating service costs in our FAQs.
Challenge 5: Building the Right Team
We mentioned company silos and communication issues in Challenge #3. Selecting the right team members for your ERP assessment and implementation team can help address some of those challenges. While many people see ERP adoption as an IT priority, the reality is your new ERP system will impact many employees across many functions of your business.
Building the right team is essential to your success. Be sure your ERP team is made up of people from key departments throughout your organization. Include employees at all levels — executives, mid-level managers, project managers, and those responsible for day-to-day tasks that are a part of your ERP.
Challenge #6: Bad Data
If you’re migrating to new a business management solution and you lose valuable data or complete implementation with data that’s inaccessible, your ERP implementation process may be a big flop.
Bad data can be a big fail point for your ERP program. Be sure your vendor can handle data migration and can manage data integration without losing data quality or thwarting essential operations caused by data loss.
Challenge #7: Not Enough Time
ERP selection, implementation, adoption, and training can be time consuming. Often, key players need to be reassigned away from their normal daily tasks so they can focus full-time on ERP transitions. Work with your ERP vendor to create a project timeline that includes key roles and responsibilities. Compare this to your organizational needs and daily operational objectives. Align the two and then set an implementation timeline that realistically enables your company to function as you need while ERP implementation gets the attention and time it deserves. Remember, the more time spent on the front end of planning and implementation, the more likely it is that your team can tackle issues before they negatively impact operations post-adoption.
Challenge #8: Change Management Issues
Let’s say you’ve considered all your business goals and objectives. You’ve selected the best ERP for your needs. You’re working with a great vendor. Your budget is on point. You’ve given yourself enough time to work through each stage of the process. Your data migrated successfully and all systems are operational. But what happens when the people affected by the new system don’t embrace the change? What if they prefer to do things the way they’ve always been done? What if naysayers negatively impact employee perception of all the work your team accomplished?
The reality is, not everyone likes change and even fewer like change that’s forced upon them without their input. About 45% of people from the TEC survey said poor change management is a factor in ERP implementation, and unfortunately, change management is an area often overlooked in business.
When planning for your ERP, be sure to create plans that address change management — not just for the processes and technologies, but people, too. ERP is more than a behind-the-scenes solution. It can affect an entire operation.
One way to help manage this change is to ensure you’ve addressed the communications and team member challenges mentioned earlier, but also by providing adequate and efficient training on the new ERP system. Create a training schedule that gives employees enough time to get comfortable with the new system and addresses questions and concerns. Encourage feedback and reward employees whose suggestions make your operations better.
Efficiencies With ERP
Once you’ve overcome these challenges, you’ll be well on your way to improving business efficiencies with your new ERP solution. Your operation will run more smoothly, your team will be able to automate many tasks that may have previously been done manually, and you’ll have instant access to data and insight that can help your company make better operational decisions. Ready to learn more? Register now to reserve your seat at our next webinar.
"I started searching for an ERP solution for our company using the brute force approach — contact as many software vendors as possible and compare. I went through about a dozen vendors, not finding the perfect fit, until I came across aACE. The aACE Software team initially struck me as unique, refreshingly knowledgeable and very in-tune with the modern demands of an ERP software package — solving problems with their software that no one else seemed to give a second thought, and making mainstream technology and media work the way it should for a company. The efficiencies built into the software are strong on all fronts — especially accounting and order fulfillment tracking. I definitely recommend the superior product and the team behind it that makes it so." ~ Derek Navratil, IT Administrator, Essential Water Solutions, Inc.