Why Half of ERP Implementations Fail ?

1.   Lack of proper staff training. - If the staff of the organization is not properly trained by the ERP Implementation Team even the best of ERPs will fail.

2.   Lack of commitment from the TOP Management. - The TOP Management has to ask all the different departments to work on their respective modules and provide them reports and data in computerized format.

3.   Lack of resources in the organization. - ERPs need proper server, network architecture, security from viruses, Internet facility and a dedicated ERP Manager of the organization.

4.  Internal resistance by employees to work on a new system. - The management has to motivate the staff to work into a new and hi-tech environment as that is the demand of future. Once the staff comes live on the ERP then they too will appreciate the fast working with the EPR as it will make their work very easy and error free.

5. When a Bottom Up approach is used. - The ERPs are to be viewed as a TOP Management Priority to keep all the departments in check and manage them in an centralized view.

6. When clients do not plan the future expenses. - As the organizations grow the requirements of the ERP grows with time. Clients have to understand the charges of AMC, Customizations, additional onsite support after implementation etc. while purchasing the ERP to avoid confusions and confrontations later.

7. Inability to provide timely customizations and enhancements in the ERP by Vendor. -  All organizations are working under the rules and guidelines of the Government or some parent body, these bodies changes the rules and guidelines for the organizations/businesses and so these have to be incorporated into the ERP too to make the organization ready for that change.

8. Lack of proper usage of some department. - ERP Implementation is a race where everyone’s legs are tied up with each other. If one fails that creats problems for all. ERP brings centralization of all departments so that information can flow between departments easily. If some of the department(s) does not work properly it becomes problem for the others. It’s the provocative of the ERP Manager to make sure all departments are working in tandem with each other on the ERP.

9. Wrong selection of ERP. - If the organization is an University they should not buy a solution made for a College or School. The client and vendor both have to understand the fisiablity of the EPR in the organization before the deal.

10. Rome was not built in a Day. - The companies developing and implementing ERP solutions have proper idea how ERP works. Many organizations feel that they themselves can make ERP Solutions by deploying a team of developers. It’s not impossible but such organizations make solutions which are very unique to their own style & comfort of working which hampers the standardization of processes. In such cases most of the ERP fails or what actually happens is that only few modules are made live, most of the modules are not made because of their complications and the organization gets in a mode where neither they are on a complete ERP nor they are without automation. ERP developing vendors make sure that all processes are on standard format as per the industry and are updated time to time as required.

What to keep in Mind while finalizing an ERP ?

1. No. of ERP Implementations done by Vendor. - Many new companies come into the market and claim that they have an ERP which is new and better from all others in market. This is a complete wrong logic for selecting an ERP. A client should not become a place for 1st experience for the ERP. Always trust on an ERP which has many organizations already working on for minimum more than 1 financial year. This will give you the assurance that all processes are in working conditions and the ERP has gone ahead with the test of time, errors, bugs etc.        

2. Feedback from existing ERP clients of the Vendor. - Before finalizing an ERP its important that you talk to some clients of ERP Vendor. A vendor who is confident of his ERP will not hesitate to give you contact details of his clients for real feedback. All the clients of ERP Vendor might not be using the full ERP because of their own reasons so it’s better to take the contact details of the clients from the ERP Vendor where they have successfully implemented the ERP.         

3. Total Modules of the ERP provided by the Vendor. - A solutions which centrally automates and covers all the departments and processes of an organization can only be called ERP. Before finalizing it should be checked that the ERP is actually covering everything for which it is meant for or not. Incomplete ERPs will obviously not be able to automate all the processes.        

4. Future Plans of the Vendor with the ERP. - Once an organization starts working on an ERP it’s really very difficult to roll back to old manual working or migrating to a new ERP. Hence it’s important that the vendor who is providing the ERP should have a long term vision and plan for satisfying the future needs of the organization.         


5. Cost of Ownership incurred by Client. - ERP Implementation is a huge process where various levels like Installation, GAP Analysis, Customization, Data Entry, Staff Training etc. are involved. Before finalizing the time needed for GO LIVE of the ERP should be checked and it should be analyzed that how much manpower and support the vendor is providing the client for a smooth and quick Implementation. A very long implementation process brings lack of interest in the staff and indirect expenses for the organization.        

6. Implementation Plan of the Vendor and Payment Installments accordingly. - The Payments for ERPs always have to be on the basis of milestones and in installments accordingly. Clients have to understand the charges of AMC, Customizations, additional onsite support after implementation etc. while purchasing the ERP to avoid confusions and confrontations later.        

7. After Sales Support - Once the ERP is successfully Implemented then also constant support from the vendor is needed in terms of training to the new people joining the organization, customizations and error handling. The ERP Vendor should have a constant support cell that can give support to the clients as and when needed and also develop new processes if required. Good ERP vendors keep a documentation system in place so as to keep track of every issue raised by the client and the timely solution provided to the client for the same.        

8. Data Security - Since all the data from all the departments are managed into ERP Security of that data is of prime importance. Security of Database should be managed on the server. The ERP should have proper management on user rights so that details cannot leak out to wrong hands.        

9. Resources Required to run the ERP - The client should have or should be ready to invest in all the resources like servers, additional computers, proper network architecture supporting licenses, qualified staff/ERP Manager etc. ERP Vendors usually do not provide hardware interfacing devices like bar code scanners, time and attendance machines and I Cards etc. these things will have to be additionally purchased by the clients. The ERP however should have the features of integration from all these hardware.        

10. Experience and Confidence of the Vendor - ERP are a wonderful example of use of technology to make life easy and in business terms reduce efforts and time to generate better results and profits. Before finalizing an ERP the confidence of the ERP Vendor in his system and his past experiences with all his ERP Clients have to be discussed as that is the foundation for a successful ERP Implementation by him.