ERP – It’s easy to see it as an almost “miracle” solution to businesses that need to coordinate all of their functions and to keep every department “in the loop” regarding the functions and actions of all other departments.
First and foremost, ERP is a software system. It integrates the software systems from all departments into a single program that will run on a single database. Information and activity can be shared, and departments can collaborate when necessary.
The Transition May Not Go Smoothly
While a fully integrated approach through an ERP system has a great payback, getting there may not be easy. First, each department has its own software system and is invested in it. Giving up some of the features and elements to which personnel are comfortable can be an issue. The goal is for each department to keep its legacy software but to have an overriding system that lets one department access another and see what is going on.
Consider this example. An order is placed by a consumer. That order comes into one department. That department then must send that order somewhere else for fulfillment, usually the warehouse. If it is in the current inventory, then it can be processed and sent to the shipping department, which has its own software system. Now, suppose the customer calls the support department to check on his/her order. That department does not have access to warehouse and shipping and so must communicate with those departments to check before responding to the customer. This is inefficient and time-consuming, and most enterprises now have ERP software so that customer service can access the warehouse and shipping software and quickly get answers.
But getting there can be a crooked path with errors – errors in software selection, deployment, and implementation. Just in the area of software selection, there is an amazing number of software choices -choices that can confuse even the most seasoned IT pros. In fact, there are common errors in selection, deployment, and implementation, not to mention maintenance.
Here are 10 errors by enterprises that can be avoided with some proactive tactics.
1. Failure to Identify Existing Issues and Requirements
There may easily be legacy software systems for departments that are outdated and inefficient. Making the decision to transition to an ERP system is the perfect “excuse” to evaluate current systems and identify where they can be improved before migrating them to a new system. If they are not fixed, ERP software will not make them any better, only faster.
Example: You may have a software system that provides machine translations for customers from other countries. That software has dramatically improved recently, and yours may be outdated and providing poor translations. Before migrating that software, take a look at what translation services are offering in the way of machine translation. Much of this new software includes machine learning which will enhance your translation accuracy.
2. Not Including Stakeholders in the Process
The c-level executive must approve any final decisions, of course. But if the actual users are not brought into the process, critical issues, pain points, and needs may never surface. Then, you end up with resentment and a system that users are not invested in. Getting them to buy-in after the fact is tough, and it may indeed never happen.
3. Ignoring or Underestimating Budgetary Requirements
It’s not just the cost of the software solution – it’s the expertise to deploy and implement. This may involve contracting out some services of even adding permanent staff for maintenance. If your organization does not have the level of talent you need, get it. Failing to do so, and trying to make do with the staff you currently have can result in a disastrous implementation. Do not assume that your current tech staff will just “catch on.” At the very least, get them the full training they need.
4. Not Looking at Niche-Specific Solutions
A part of this large array of ERP software solutions includes small software development firms that are niche-specific. These have the potential to better meet the needs of related enterprises. It makes sense to take a long hard look at any software that has been developed for your specific sector. The ERP needs of a manufacturing company will differ from those of an online retailer.
5. Not Comparing Benefits of Cloud-Based vs. In-House Solutions
Certainly, there are benefits to a cloud-based solution, many of them financial. There is no need to update hardware and servers, and staff needs many be fewer. But, using SaaS has its drawbacks and challenges too, even though it is by far the preferred platform today.
Using SaaS solutions means that customization is often minimal, and a business may need to alter its processes. This obviously will impact the integration of legacy software systems which may need to be altered as well. And if the selected SaaS does not have all of your unique required features, you may be looking at some third-party software or a major overhaul of your legacy systems.
6. Not Seeing Past the “Eye Candy”
The ERP software industry is highly competitive, so it is only natural that lots of bells and whistles will be added to make a firm’s solution seem more attractive. When you see a long list of features, go through them carefully – many will not be relevant to your needs. And far more important is a firm’s reputation and its success rate, along with its skill in customizing for your requirements.
7. Ignoring the Impact of Change on Employees
It’s called change management, and it is every bit as important as the product you purchase. Just looking at the technology and process changes, and assuming that you can simply train your employees to use the new system, is ignoring a key element of success. For example, employees in the customer service department are not used to accessing the warehouse department system and interacting in this new way with staff in that department. And training should occur across departments in collaboration, not in isolation. Issues must be identified and ironed out with such collaborative interaction.
8. Failure to Implement in Small Steps
Launching a complex ERP system takes a unique approach. Trying to figure out all of the requirements for implementation up front and then moving forward with it all at once can overwhelm users and result in gaps and bugs. Implementation is better served through an agile approach, one that occurs in small steps with testing all along the way that will find those gaps and bugs.
9. Ignoring the Need for Ongoing Communication Among Departments
There should be a communication plan in place at the onset. And after implementation, this is just as important. There should be a team in place – representatives from all departments and from IT- that meet regularly to address any collaboration issues that can arise. Lack of communication among departments is a big factor in ERP Software failures.
10. Not Planning for Maintenance
ERP is, above all else, a software system. And software needs maintenance if only to keep it from becoming outdated. Being outdated can, among other things, affect security. A plan should involve at least one in-house specialist, even if the major maintenance operations are outsourced.
ERP Software is really not an option anymore. Businesses that intend to stay competitive and provide the operations that keep both staff and customers happy should understand the importance of collaboration among departments and the streamlining that this software can provide. But it has to be done right. Being mindful of these potential mistakes and planning ahead to avoid them will mean a good deployment, implementation, and long-term effectiveness.
Dina Indelicato is a blogger enthusiast and freelance writer. She is always open to research about new topics and gain new experiences to share with her readers. Currently, she is a writer for Pick Writers You can find her on Twitter @DinaIndelicato and Facebook.