ERP Implementation: The Challenges and How to Avoid Them

ERP Implementation Challenges and How to Avoid Them

Implementing an ERP system can be a daunting task, with challenges for any company, large or small. If you are aware of the main challenges though, you can prepare and plan for them. The result will be a successful implementation of your ERP, giving you a business management solution that runs your whole company, bringing greater efficiency, productivity via automation and powerful analytics for better decision-making.

Here are the primary challenges that you might encounter with an ERP implementation, plus some best practices for making sure they don’t arise in the first place, or how you can overcome those that do.

ERP Implementation Planning

Your ERP implementation project will require a thorough plan, with a detailed breakdown of all the phases. These include discovery, design, data migration, pre-launch testing, deployment, user-acceptance testing, support and post-launch changes and updates.

Challenges can arise if your ERP implementation planning is not detailed enough or you don’t allocate sufficient time and resource to it. The well-known adage here is absolutely true: if you fail to prepare, you are preparing to fail.

A particular shortcoming is when the scope of the project changes as you go along. This scope creep can come about you add to the functionality requirements after the scope has already been agreed. This adds to the time and cost of the project, preventing implementation partners from adhering closely to the plan.

The best way to avoid any planning issues is to be realistic about how long each stage will take and build in plenty of contingency time. It may be tempting to create a plan that has your new ERP implemented in lightning-fast time, but it will be easier to stay on track if your plan is reasonable and attainable from the start.

ERP Project Management

Once your project is underway, it’s important key that key milestones are achieved on time. Delays and diversions from the plan will eventually cost you time and money.

To stay on schedule, you need a strong project management team. They need to ensure the cooperation and participation of all stakeholders and generally maintain good oversight of the project. Communications are key too. Ensuring that all interested parties know the status and details of a project will help manage expectations and encouraging a dialogue will mean any issues will be raised sooner rather than later.

ERP Data Migration and Quality

Integrating your data from your old system, or your various systems is a critical step in the implementation. ERP data migration is a complex process, which itself has many stages. You might have data in a number of different sources, with varied formatting. This needs to be audited, cleaned and reformatted with a consistent approach.

The challenge often begins in locating and reformatting all the data. Each department will likely hold different types of data, with different fields and sub-sets of information. On top of that, some may be on paper, others in spreadsheets, or held in all manner of software applications.

This presents an opportunity to not only streamline your data, but also to de-duplicate and clean it, and delete or archive any obsolete information. It will probably be challenging to map different pieces of data to a single customer or supplier, for example. The data your sales team and your marketing department hold – even for the same customer or prospect – can be vastly different. All the data must be assessed and validated, and all stakeholders will have to agree a common approach for the formatting. While data needs differ, an ERP is a single database of information, so this cleaning and formatting is a crucial stage in ensuring that data is as accurate and relevant as possible.

Managing Change

When you implement a new ERP system, it’s a perfect time to assess and change your business processes. You may be following certain procedures because of the constraints of your current system, or if you have no ERP system, because you need to follow a manual process.

When you change businesses processes and require staff to get used to a new system at the same time, this can lead to resistance among some staff. Change is not universally accepted by all, so managing these changes is paramount in avoiding resistance. If you can smooth the onboarding of any transformations, then attitudes and behaviours will shift accordingly and you will see better adaptation and acceptance. There are some best practices approaches to achieving this. These include: gaining buy-in at a senior level across the company; ensuring frequent, honest and timely communications; and delivering early and comprehensive training for all users.

Managing Budgets

If your project overruns, or if the scope is expanded during the course of the ERP implementation, then your costs will increase.

Accurate planning and adherence to the project plan will mitigate this. But it is often the case that unforeseen circumstances or needs will require some extra time or human resource. To ensure you stay within budget, careful budgetary planning is required. Data migration can cost 10% or 15% more than expected, and you may have forgotten to account for aspects such as training or additional customisations that come up once the project is underway. Including some extra budget as contingency is preferable to going over budget and having to find a way of reallocating the necessary funds.

Achieving Continuous Improvement

It would be short-sighted to assume that your challenges are over once your new system is live. Companies grow and evolve. You may implement new processes or look to adapt them to achieve greater business agility. Growth might see you incorporating new companies or subsidiaries or expanding overseas. With any evolution like this, you want your ERP system to develop with you.

These kinds of challenges are more welcome than some of the others, though, because they reflect the progression and greater profitability of your business. To meet them, however, requires that you regularly review the system to check that it still meets your requirements, and then plan for any new developments. Outdated systems are likely to hamper your business.

Here, cloud-based systems like NetSuite are a better option than on-premises ERP solutions. They are updated and improved on an ongoing basis, at no extra cost, and without you needing to disrupt your business or employ specialist IT staff to supervise upgrades. They make it easy for you to maintain an up-to-date ERP system, which sees continuous improvement and hence will maximise your business performance.

 

NoBlue has considerable experience of ERP implementation projects and can help you to meet and overcome all these challenges. For a free business consultation or a quote, book an appointment today or get in touch.

 

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