Enterprise resource planning (ERP) has grown increasingly complex. As options for ERP systems continue to rise, companies have struggled to choose, implement, and integrate the right ERP systems for their business’ needs. Organizations must set specific checklists for selecting and implementing an ERP that aligns with company objectives.
Organizations can build a foundation for new ERP system implementation and integration with a plan to get ahead of three primary ERP-related challenges.
Challenge #1: Time-consuming ERP Integration Projects
Launching and integrating a new ERP system can be time-consuming, with projects often extending beyond the expected timeframes and expectations.
According to data from Panorama Consulting Solutions, 57% of ERP projects exceed their initial estimated timeline, and the average time it takes to fully launch an enterprise software initiative is 21 months.
ERP challenges can feel daunting, especially when they revolve around a new ERP that will require further customization and related training. Successful organizations take the time to refine the implementation process for long-term efficiency. According to CIO, “Implementing a new ERP system is an opportunity to identify and improve/redesign your business processes. Automating a bad process only makes a bad process run faster.”
Solution: Embrace an Agile Mindset
G2 explains the experience of launching a new ERP integration as being “a continuous process that must be constantly nurtured and monitored in order to ensure a successful fusion of data, workflows, departments, and even individuals into the new institutional norm you are seeking to create by introducing a new—or the first—ERP system into your organization.”
As such, a more agile approach needs to be taken, and ERP implementations should be broken down into “small steps with end-user involvement at every step to determine requirements, test, find gaps and then repeat.”
As the saying goes, slow and steady wins the race. Provide enough time for a new ERP (and your team) to mature to create a more cost-effective and long-lasting solution for your organization’s processes.
Challenge #2: Breakdowns of Internal Communication
The challenges above have the potential to feed into each other and exacerbate their effects. For example, failing to communicate the why, how, what, and when of an ERP integration will lead to a breakdown of communication between the people responsible for launching the ERP and the team using the ERP. This lack of communication will then, in turn, slow down the time it takes for a new ERP to start generating results.
Circumstances such as the following can often cause this breakdown in communication lines:
An organization makes an ERP purchasing decision based on a demo and begins implementing it into their business processes. However, if the organization fails to include or properly communicate with a specific department on specific needs requirements, the implementation process can cause more tension - and delays.
Similarly, failing to get a full debrief from the ERP vendor will also lead to communication problems. Organizations must gather all pertinent data points to address any potential questions or roadblocks.
Solution: Create an Internal Team Responsible for ERP Implementation
To avoid a communication breakdown, develop a project communication plan and a dedicated team to take ownership of it. Communication plans can take several forms (a project portal or a dedicated FAQ document shared across the company), but the plan won’t succeed without a dedicated team responsible for maintaining it.
The more developed your implementation and communication plan is, the smoother the ERP integration process will be. According to a recent Deloitte study, five of the top ten barriers to a successful ERP journey (listed in the graph below) “can be addressed by developing and implementing a structured change management program.”
Deloitte further explains how adequate sponsorship and leadership during an ERP integration will require your company to:
- Determine a project sponsor/implementation team leader and communicate this to the team
- Identify organizational leaders whose support and understanding will be crucial
- Put on a presentation for decision-makers, so they’re aware of the timeline and benefits of an ERP system integration
- Create leadership alignment plans (ex. incentives)
- Facilitate cross-functional sessions with departmental leaders early on in the integration process to clearly define objectives, point out potential roadblocks, and clarify the level of involvement required
Challenge #3: Lack of Subject Matter Expertise and Experience
Organizations must have an understanding of the inner-workings of an ERP as well as any integration points—such as EDI, cloud systems, SaaS applications—to fully optimize its use and gain a true return on investment. However, many teams lack the knowledge necessary to adapt to a new ERP’s functionalities and potential integration points. Organizations that don’t have properly trained professionals (which occurs when there’s a breakdown of communication) will struggle to grow and generate meaningful results.
This challenge is further exacerbated when an organization lacks the best practices or methodologies in place to outline how specific integrations are meant to work or be leveraged. Handing a new ERP or ERP feature set to an unprepared implementation or set of users can be like giving a car mechanic a chainsaw; it’s a useful tool but might be better suited for a different department or skill set.
“It’s surprisingly easy, when caught in the whirlwind of implementing a large and complex software system like ERP, to completely neglect the needs of the end-users,” G2 says. “The process of implementation requires that you and your team develop a deep understanding of both the concepts and systems with which you are working.”
Solution: Training, Outsourcing, and Collaboration
Equip your teams with the necessary training to get the most value out of an ERP system integration. Organizations can choose to outsource this functionality to a third-party (such as the vendor responsible for the ERP implementation or integration). Organizations can also assign members of the implementation team to spearhead an education initiative that equips each relevant department with the information it needs to use the ERP system.
However, G2 urges that this step “goes far beyond simple technical training as well; you need to be prepared for a lengthy process of knowledge sharing, change management, and stakeholder convincing in order to complete this milestone.” Again, we see the importance of investing in a new ERP software, the implementation, and the integration points—the success of an organization depends upon it.
Lean More About How to Launch a Successful ERP System Integration
If you’re on the precipice of launching a new ERP or need some help regaining traction on the software you recently began implementing, sign up for our next webinar, Strategies for Overcoming Integration Pitfalls and listen to our expert panel from LYSI Consulting.
DiCentral has over 20 years of experience in helping organizations launch, maintain, and integrate ERP systems. Our upcoming webinar will offer a deep-dive into the kinds of challenges (and solutions) that revolve around ERP integrations in 2020 and beyond.