New ERP software brings new possibilities and opportunities. But it also entails great risks. I have listed the seven biggest risks according to entrepreneurs when moving to new ERP software. It is useful to know the risks, because then you will be better able to prevent your ERP implementation from failure.
1) Are my expectations realistic?
It is not always clear what new ERP software is going to bring. Not even after attending an extensive demo of the software. It is therefore important to make clear agreements with the software supplier and to define the project in detail. It is also important to manage expectations well internally and to keep your staff well informed.
2) Could this step be too big for us?
Moving to new ERP software has a huge impact on the organization. Existing methods and business processes are changed and this affects all aspects of the organization. But it is important to keep track of the ultimate goal: improvement! The step you take is a step forward.
3) Do my people feel engaged in the project?
Chances are that your employees do not support the choice for the new ERP software. By showing them the value of the new system and by informing them and involving them continuously in the selection process and the implementation, your people will feel more engaged in the project and you increase the likelihood that the implementation will turn into a success.
4) Will the project be completed within time and budget?
Perhaps the greatest fear of every entrepreneur when it comes to an ERP implementation; the project goes on endlessly and costs keep building up. What you should do: write a clear, stepwise and detailed project plan together with the software vendor with clear objectives and milestones.
5) Does the new ERP software offer the flexibility I need?
What people fear when they have to work with a new system is that they no longer have the freedom and possibilities the prior system offered to them. But this fear is often unnecessary. When you choose an industry-specific ERP package developed for your type of business, then your processes will fit in. And if that is not the case; discuss your requirements with the supplier and come up together with a suitable solution.
6) How can we make use of all features of the software?
On average, only 54% of the features of an ERP system is actually used. When you get more product features and when the system is more complex, it becomes more likely that functionalities are left unused. Therefore you should opt for a user-friendly and simple system: fast and easy to learn and you only pay for what you use.
7) Does this project deliver me what I need?
The decision to go for new ERP software is often urged by the feeling that something needs to change. Whether that is cost reduction, a better understanding of your business or work more efficiently. You should define the key drivers to change for your organization and focus on these topics together with the software vendor. Will you improve in these areas? Then the investment will pay off.
Remko Gaastra is President of Dysel USA and responsible for Marketing. He discusses on a day-to-day basis the risks (potential) customers experience with ERP software and how to deal with these risks.