Enterprise Resource Planning (ERP) is an integral component of today’s complex global marketplace and a backbone for businesses looking to restructure their operations, boost productivity, and enhance decision-making. It plays a crucial role in providing a centralised system, acting as a single source of truth. Therefore unsurprisingly, it is vital that the ERP implementation journey be well-planned, well-executed, and well-maintained.
The transition to a new ERP system is not always that easy however, it can be a complicated process and I’ll highlight some of the common challenges and how to manage them.
Challenge #1: Business case
The organisation needs to buy into the idea of the new technology. Concerns of workflow disruptions and unfamiliarity with new systems need to be overcome. Building a genuinely compelling business case is essential to address the inevitable resistance to change, and to enable the ERP implementation project to take off.
A well-crafted business case will demonstrate how the ERP system aligns with and supports the organisation's strategic objectives such as improving operational efficiency or enabling growth and scalability.
Presenting the anticipated positive Return on Investment (ROI) of the implementation is a must-have. Commit to Key Performance Indicators (KPIs) that accurately measure all impacted business processes to demonstrate the real value-add of the ERP implementation.
Assessing the project’s feasibility from financial, organisational, cultural, and technical perspectives to accommodate the integrated ERP system, helps set expectations from the start. By including these key components, the business case justifies the ERP investment, secures stakeholder buy-in, and lays the foundation for a successful implementation aligned with the company's overall strategy.
Challenge #2: Stakeholder engagement
Many stakeholders’ perceptions are established by the capabilities of legacy systems, potentially leading to an underestimation of modern ERP solutions. ERPs offer a spectrum of functionalities and embracing the integration capabilities with other systems opens up the possibilities for an all-encompassing solution. For this reason, employees across key business domains need to be involved in the early stages of the process to understand the need and value of change.
Stakeholders should review the existing technological architecture and map the business processes to help create a holistic and future-ready ERP strategy and roadmap. Standardising and formalising business workflows, procedures, and processes requires effort but ultimately leads to operational coherence, eliminates inefficiencies, and engages the users most affected by the implementation.
ERP implementation, and the process re-engineering that typically accompanies it, require a shift in mindset and a change in how daily activities are executed for many employees. This presents typical change management challenges. To address these challenges, the features and advantages of the new ERP should be communicated to all stakeholders throughout the implementation process, especially end-users on the front lines. Comprehensive training and support for users also smoothens their paths to adopting the system.
Challenge #3: Customisations
Old habits die hard and this is the case when implementing new technology into the organisation’s digital ecosystem. There is a strong temptation for end-users to want the new platform to act and feel like the old or incumbent system. Replicating old processes means failing to leverage improved functionality, scalability, and automation.
Implementing a new ERP system but forcing it to operate like a legacy system often leads to customisations that could impede future upgrades and the ability to take full advantage of technological advancements. In most cases, we recommend staying as close to out-of-the-box functionality as possible. Establishing the right governance structure to offer the critical eye necessary to vet any proposed changes will help maintain control and direction.
In essence, do not squander the chance to streamline processes, improve insights, reduce costs, and drive the innovation that modern ERP solutions enable. Companies should embrace the latest ERP capabilities instead of replicating outdated constraints.
Challenge #4: Post-go-live support
Post-go-live support is crucial for the long-term success of an ERP implementation. Having subject matter experts on hand will promote a frictionless transition allowing the organisation to address any unforeseen teething issues and mitigate unexpected disruptions. This ensures the continued stability and reliability of the system and business operations.
The provision of ongoing training, support, and feedback mechanisms empowers employees with the knowledge and skills needed to fully embrace and utilise the new ERP system, driving user adoption, efficiency, and productivity.
To maximize ROI and continue realising benefits, the ERP system must evolve alongside the business, preventing it from becoming outdated and unfit for purpose. Therefore, continuous improvements, proactive issue resolution, and constant realignment of the system’s functions with evolving business needs and industry trends ensure that organisations achieve the full potential of their ERP investment.
Remember, an ERP implementation is not a one-off effort that ends when the new system goes live. The solution must continue to evolve to support new business demands and technology. The project team needs to continue to manage the project after deployment, fixing issues and supporting new requirements as they come up.
Conclusion
In summary, the path to a successful ERP implementation is fraught with challenges that demand careful navigation, strategic solutions, and expert guidance. Like any technology implementation, there are various hurdles that organisations might face but being aware of ways to prevent or overcome these obstacles from the beginning should set you up for success.
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