Why ERP Implementations Fail

CFO frustrated by failed ERP implementation

We discussed the 5 biggest pitfalls that occur during an ERP software application implementation on The ERP Advisor podcast, where we detailed the biggest reasons implementations fail, and how to avoid them. However, even if you avoid these common pitfalls, you still aren’t guaranteed success.

So here are some additional reasons why ERP implementations fail — ones we have seen firsthand in our years of experience. While these reasons aren’t always obvious, they can cause major problems if they aren’t addressed.

Don't underestimate the importance of training

You’ve got to make sure that the people who will be using the new system know how to use it. Every implementation program generally has a training plan, but the presence of a plan does not necessarily mean that it will be effective. Your employees may attend the training, but they have day jobs which means that they might be answering emails or addressing emergencies while the training is taking place. Then, when asked about the new software application, they will say they are unhappy with it and mainly because they don’t know how to use it.

Put accountability on the person learning the software application

While this may sound obvious, it’s true and it works. For example, while a trainer can stand at the front of the room and tell everyone how to use the software, the only way they are going to learn is if they do it for themselves. During the training, ask everyone to get in groups and practice entering orders or handling other common tasks. This will ensure they know how to use the software application and if they have questions, they are in a position to ask them. Putting the accountability back on the employees can really help ensure that they know how to use the system and that they are benefiting from it.

Watch out for those who don’t want the project to succeed

We never like seeing an implementation fail, but one of the most unpleasant ways it can is when your own teammates sabotage the process. Some of your coworkers may not want your project to succeed and may actively work for its failure.

It’s normal for people to bring up concerns so the business manager or implementation team can address them. It’s also normal, especially for longtime employees, to feel hesitant or uncomfortable about a big change. But there are also people who go well beyond normal or helpful levels of questioning and discomfort — we’re talking about the people that have an overall bad attitude, who treat a crucial implementation project as a personal affront to their workday, and who openly refuse to let the project be a success. Ultimately, you will need to have a talk with these people and let them know that they either need to get on board or leave. It sounds harsh but it’s true: if a software application implementation can help your company grow and flourish, one person can not be allowed to stand in the way of that. You are simply protecting your job and your company by dealing with that individual.

When to Pull The Plug on an Implementation Project

Have you ever had or known someone who had a “money pit” home improvement project? One of those projects with poor preparation, compounded problems, continual unexpected issues and uncontrollable expenses piled up? At what point do you just stop and say you’ve wasted too much money on this project?

It’s hard to get out of the cycle because if you continue, the project will continue to require more money, more time, and more work, but if you stop, you’re stuck living with something half-finished and potentially unusable. The same goes for your software implementation. At what point do you just stop?

Last week we discussed the causes of a botched implementation project and how to avoid them. This week, we are talking about when you should pull the plug on an implementation project or when to keep going. You can find the entire episode of the ERP Advisor Conference Call here, or read a summary of the call below.

JUST STOP!

In our experience, if you have any questions about the implementation or feel that it is not going well, it’s always best to just stop. In our experience, 99% of the time it’s only going to get worse unless something fundamentally changes, like an implementation partner resigns or assigns a stronger resource to run it, or you’re able to put a stronger internal resource on the project, or even hire a consulting firm like ours to come in and fix things.

Unless you make a major change, the implementation will continue to spiral out of control.

Although it’s a painful decision to make, we find it is always better to just put a full stop on the project. Tell your resources that they need to stop billing you and you are not paying them another dime beyond this point. This will get the attention of your vendors, and even internal resources to stop and review everything that is happening with the project:

  • Where are we supposed to be on this project?
  • Where are we now, and what direction are we headed in?
  • Where are we relative to the project scope?
  • What have we consumed in terms of time, money and resources to date?

Your implementation partners don’t want to lose the job, so they will work to get everything straightened out. You can stop for just a day or you can stop for weeks at a time — either way, stopping everything to review the project and get it back on track is what it often takes to salvage a botched implementation.

If you can come up with a good plan for moving forward, then you can pick the project back up. If you can’t, then it is a botched implementation and you may just need to stop altogether and suffer the consequences because that scenario may actually be better than continuing to bleed time and money.

Organizations spend MANY thousands of dollars on software each year, and while those tools should meet all your objectives and run smoothly, we all know that is not often the case. There are many signs that an implementation is going badly and there are ways to help mitigate some of the risks.

Ultimately, though, if your implementation is headed downhill, it’s best to just stop and reevaluate the project before moving forward and losing more money.

Avoiding all of the pitfalls will help make your implementation process smoother. ERP software implementations have a high rate of failure, but we hope that by sharing some of the most common pitfalls, you can avoid them and increase your rate of success. If you have any questions, feel free to reach out to us. At ERP Advisors Group, we specialize in supporting you through your entire selection and implementation process to help ensure success.

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