You’re sold. That’s why you’re here — because you believe you need and want an Enterprise Resource Planning Solution. The thought of having all of your critical business data from various departments available and accessible on-demand, in real-time, anytime and anywhere you need it, is intoxicating.
Imagine not having to wait days for the latest report from sales on performance and targets, from accounting on receivables, collections, cash flow position, and operations on capacity utilization, job status, etc. That’s just prodigiously efficient. You want enterprise resource planning or ERP, and you wanted it yesterday.
Well, hold your horses. Do not forget to consult an independent ERP advisory. ERP is incredibly useful, but it can also be highly complicated and expensive. If you do not implement it correctly, you set yourself up for a very costly fall.
The Pitfalls of ERP Implementation
There are two main pitfalls to ERP implementation.
- Choosing the Wrong ERP Solution
You will probably hear only good things about their software if you talk to an ERP vendor. You will be told the problems it will solve, the benefits you will enjoy. However, if you only listen to that one vendor about ERP, you might get too focused on one aspect or facet of the solution that you could miss the big picture. It’s a classic case of “losing sight of the forest for the trees.”
ERP is a solution that will integrate various business processes, functions/division and systems in an enterprise. Therefore, when choosing an ERP solution, you must remember to choose one that will work for the entirety of your organization.
A common pitfall of organizations implementing ERP is choosing an inappropriate ERP solution. For instance, one might choose a solution that does not fully integrate the company’s many departments. One might also pick an ERP that provides exceptional benefits to one department but negligible improvements for the rest of the departments.
This issue may also arise because organizations are unclear about their requirements and what problems the ERP solution they’re acquiring is supposed to solve. They lack direction, not only comprehensive knowledge about their ERP options.
- Unsuccessful or Incomplete Implementation
ERP requires an extensive overhaul of existing systems. Even if you have the perfect ERP application, it will remain an expensive but useless acquisition if you cannot implement it correctly.
One of the many potential hurdles you must overcome is the resistance of your executives and personnel to ERP adoption. “If it ain’t broke, why fix it?” is what some of them would be thinking. What they know is that the systems they’re using are working and working well for their specific purposes. Why do they suddenly need to shift to (what seems to them) an unproven, unnecessarily complicated system?
Another potential challenge to successful implementation is the lack of clear implementation guidelines and guidance. You and your people might be willing to shift to your brand-new ERP system, but if you don’t know how to start — and no proper guidance is forthcoming — it will all be for naught.
The lack of personnel (or time to devote to implementation, testing and migration) can also contribute to ERP implementation failure. Your existing employees have urgent and regular tasks they must do, and they do not have time to implement your ERP, too. Thus, if an organization transitions to ERP but doesn’t consider human resource allocation, it is setting itself up to fail.
Finally, even if you have the correct software and enthusiastic people, implementation will fall through if your legacy data (master data like customer, supplier, item list and closing balances of accounts) cannot be ported. If this happens, you might have to spend considerable time and resources on tedious, manual data conversion processes.
Why Hire an Independent ERP Consultant?
You hire industrial engineers when setting up a shoe factory in Jinjiang, civil engineers and architects when building your headquarters, and petroleum engineers when drilling for gas and oil.
In other words, you hire experts when you wish to accomplish anything. For the same reason, you must obtain the services of an independent ERP advisory firm during this transformation.
Doing this will give you the following advantages, which will help you avoid the aforementioned ERP implementation pitfalls.
1. Systematic Selection of the Correct Application
Independent ERP consultants will thoroughly assess your organization and talk to you in depth about your requirements. They will study your existing systems and observe your current processes. They will then look at and through the ERP solutions existing in the market — and, naturally, they’d know each one by heart. Only then will they match an ERP solution to your specific requirements.
This whole vetting, analysis, and consultation process will ensure that you will get exactly the ERP solution you need — no more and no less.
2. Time and Cost Savings
Since you will get the ERP solution that matches your requirements, you will not waste money on features and tools you cannot use. You will also definitely not waste your resources on an expensive but inappropriate ERP application.
One other way an ERP advisory saves you time and money is through the streamlined integration, transition, and implementation that comes from having an expert at the helm. Your systems will be integrated seamlessly, your data migrated correctly, and your people taught how to use your new ERP software properly. This will let you mitigate downtimes, which means opportunity costs, and avoid costly mistakes like lost data.
3. Minimal Resistance to Change
Since they have been involved from the start, beginning with the consultation phase, your personnel are less likely to resist your organization’s transition to ERP. ERP consultants will also be on hand to provide expert guidance, ensuring your people will not feel inadequate or demotivated when faced with your organization’s new ERP system.
ERP Is Great But…
Yes, enterprise resource planning solutions are excellent. Just imagine a major entertainment hub like Yas Island Abu Dhabi having access to up-to-date sales data on all of its theme parks in real-time. That will give its marketing department the ability to launch personalized, flash promotions, which can, in turn, lead to improved customer engagement and increased consumer spending.
However, ERP solutions have to be chosen carefully and implemented correctly to be effective. Not all ERP solutions are equal, and what’s touted to be the market’s best solution may not necessarily be the best for your organization — thus, the need for an independent ERP advisory.
