While many companies see the advantages of implementing ERP, the actual process of integrating ERP systems can be time consuming and disruptive. More often than not, these projects end up going over budget and taking far longer than intended. The end result is that it takes significantly longer for companies to begin reaping the rewards of the resource management tools that were meant to save them money in the first place. Fortunately, we put together some helpful data points concerning ERP implementation to help you avoid these hurdles.
The first area where many companies get into trouble is not setting realistic goals for their ERP roll out. According to Panorama Consulting, 61% of ERP projects take longer than expected to reach fruition. The problem tends to arise when there is no clear project manager setting milestones and expectations for all parties. This means that there needs to be hard deadlines for each stage of the process, and that somebody needs to be tracking the actual success rates of each part of the system to know whether it has been configured and tested correctly.
It is also important for the person managing the ERP integration to have a clear idea of how to conduct the roll out. Most companies prefer dividing the process into multiple stages, which allows them to bring one division of the company in at a time, and then test it and troubleshoot before moving on to the next stage. This reduces the risk of a complete system failure compared to a single overnight implementation.
Setting a Budget and Knowing What You Need
ERP is a fluid & dynamic tool. It is not a one size fits all software solution, so there is considerable customization that takes place between first conception and actual delivery. The problem is that ERP specialists have a vast array of options that they can throw into the mix, but they may not all be relevant or useful to your company.
Panorama Consulting reports that 53% of ERP projects experience cost over runs. The key to avoiding this is to set a clear budget from the very beginning, and only choose features of the ERP system that can directly and immediately improve your operations. If you decide to add more bells and whistles later on, changes can be made, but it is important to roll out a concise and cost effective version first so that you can begin to see the return on your investment sooner rather than later.
The last of the three major challenges that companies experience with ERP is seeing very little benefit from the system once it is in place. This goes back to planning and budgeting, because it requires you to have a focused group conversation about what the precise goals of your ERP system will be. If you don’t have those goals in mind from the outset, your ERP strategy will not have a clear direction to go in.
Creating an ERP strategy that allows your company to make a smooth transition over time. In some cases this process can take as little as four to six months with a well thought out plan and a clearly defined budget. Lack of planning is the primary cause of cost and time over runs.
AlfaPeople provides ERP implementation that is based on the true needs of your company, without all of the excessive timeline and money traps. For more information about how ERP can help you improve your resource management, contact AlfaPeople today.