Failures of ERP Software Project and How to Avoid It

There have been many instances of failure of ERP projects associated even with big vendors and professionally run companies. It is easy to understand that project of this magnitude involves lot of complexities and makes it prone to mistakes which leads to its failure. Apart from this even established and reputed vendors and ERP companies hesitate to discuss about the reasons and chances of ERP failures which does not work well for the success of the project as a whole because the purchasing company does not have sufficient information about the implications of ERP.

Generally selling and buying companies most of the times are involved in the discussions which include the details of benefits of the new system. Sometimes benefits are blown out of proportion which suppresses the discussion about the pitfalls in the ERP implementation. To avoid this and have a realistic picture of the whole project the top management of the company needs to work upon the project and gain necessary details about the best practices of ERP implementation, past experiences and performances of the vendor as well as the companies who were able to install ERP successfully. This also saves the company from getting too much dependant on the consultants for executing the project. The best teams for ERP execution can be build by including most of the team members from the organization, as these people understand the company better than anyone else, too much reliance on external support and guidance increases chances of ERP failure.

Companies also fail to select the proper time for ERP implementation or they take up huge projects between implementation, such decisions distract and over burden the staff to cause ERP failures. Improper change management also accounts to number of ERP failures, most of the time in a hurry companies overlook or ignore the psyche of their own employees and try to follow the popular way of implementing ERP rather than following the most suitable way according to the culture of their own company. Such a situation creates confusion and leads to lack of trust on the new system to cause its failure. The demonstration of the proposed system shall be done according to the ‘to be’ document of the project and on the real data, this helps in knowing that how well vendor has been able to understand the company’s business and working style. If vendor is not having complete knowledge of present system it may not be able to provide a successful solution.

Choosing right approach is also very important, in order to make changes in the present business processes easily acceptable to the employees, companies employ bottom up approach, which has never succeeded so far, the whole project and each and every process shall be viewed as a top management priority. Selection of proper ERP software and implementation strategy remains important for every ERP project, ERP requiring too much customization to fit in or company adopting unsuitable strategy for implementation, can cause ERP failures. Training and knowledge transfer are also important steps those play an important role in the success of ERP implementation and ignorance or lack of sufficient concentration on these activities can cause ERP failure.

Read about Causes of ERP Failure. Also read about ERP Project Management.