Reasons Why Entrepreneurs Fail to Implement ERP and How to Avoid Them

Today ERP applications are capable of providing industry specific solutions but still large number of entrepreneurs fails to implement them. Though there are simple and basic rules to follow, to avoid failures. These days entrepreneurs seek ERP that can synchronize with the working of the company and can improve the processes and resolve the issues for better business but sometimes due to minor flaws at the time of implementation makes the whole effort worthless.

The most common and biggest reason of entrepreneurs failing to utilize ERP for benefits is poor selection of ERP software. There can be many reasons for a poor selection but inability to define functional requirements is very common. Proper cross checking of the product is not done with properly designed and derived functional requirements, which leads to poor selection. Lack of detailed study of the product and its characteristics also lead to a bad selection which makes most of the entrepreneurs fail in implementing ERP. To avoid this, from top management to the end users of the company, everyone shall be involved in testing and study of the product. Expert advices and services shall be taken to work out functional requirements of the company on paper and an exhaustive cross checking of the product shall be done with the requirements, for a proper and correct selection. ERP with successful implementations in the same industry shall be preferred rather than most popular ERP.

Entrepreneurs also fail due to lack of time and manpower required for implementation. Many a times companies over burden their employees with their regular work and implementation responsibility. This works against the company itself and forces the staff to overlook some important details and requirements which causes serious issues later to let the effort go in vain. To avoid such reasons of failure, proper time schedule shall be worked out for the implementation process and working hours of the employees, directly involved at all the levels, shall be redesigned so that they may contribute as per their ability in the process.

Not giving due importance to dry runs and testing of processes suggested by the ERP vendors also let entrepreneurs fail in implementing ERP. Lack of training to the staff leads to confusions and slow working which also causes failures. Sometimes misleading information by software vendors in calculating the cost of implementation and ROI also let entrepreneurs fail in ERP implementation. Exhaustive study before selection and expert guidance from the third party may help a lot in avoiding failures due to these reasons. Proper training of staff along with a complete understanding of the product shall be ensured as they are the ones to use the new product and will be most affected.

Wayward approach in following the changes suggested or implemented by the ERP programmers and analyst also leads to the failure of the project even though everything else is done in perfect way. Sometimes habit of taking short cuts or mistrust on the capability of the ERP, leads to lack of adherence to the changes, this shall be kept under constant check by the top management to avoid failures even after successful implementation.

Read more information on the Causes of ERP Failure. Read Microsoft Dynamics NAV Review - advantages and disadvantages.