How does one increase the likelihood of ERP success and ERP benefits realization? Many assume success or failure is the fault of the software you purchase, but in reality, 95% of aproject’s success or failure is in the hands of the company implementing the software, not the software vendor.
Critical ERP Implementation success factors
Focus on business processes and requirements first.
Too often, companies get tied up in the technical capabilities or platforms that “a particular” software supports. None of this really matters. What really matters is how you want your business operations to run and what your key business requirements are. Once you have this defined, you can engage in a more effective ERP software selection process.
Focus on achieving a healthy ERP ROI
This requires doing more than just developing a high-level business case to get approval from upper management or your board of directors. It also entails establishing key performance measures, setting baselines and targets for those measures, and tracking performance after go-live. This is the only way to maximize the business benefits of ERP.
Strong ERP project management and resource commitment.
At the end of the day, your company owns the success or failure of a large ERP project, so you should manage it accordingly. This includes ensuring you have a strong project manager and your “A-players” from the business to support and participate in the project.
Commitment from company executives.
Any project without support from it’s top-management will fail. Support from a CIO or IT Director is fine, but it’s not enough. No matter how well-run a project is, problems arise (such as conflicting business needs), so the CEO and your entire C-level staff needs to be on board to drive some of these 5. Take time to plan up front. An ERP vendor’s motive is to close a deal as soon as possible. Yours should be to make sure it gets done right. Too often, companies jump right in to a project without validating the software vendor’s understanding of business requirements or their project plan. The more time you spend ensuring these things are done right at the beginning of the project, the less time you’ll spend fixing problems later on.
Ensure adequate ERP training and change management.
ERP systems involve big change for people, and the system will not do you any good if people do not understand how to use it effectively. Therefore, spending time on money on training, change management, job design, etc. is crucial to any ERP project.
Make sure you understand why you’re implementing ERP.
This is arguably the most important one. It’s easy to see that many big companies are running SAP or Oracle and maybe you should too, but it’s harder to consider that maybe you don’t need an ERP system at all. Perhaps process improvement, organizational redesign, or targeted best-of-breed technology will meet your business objectives at a lower cost. By clearly understanding your business objectives and what you’re trying to accomplish with an ERP system, you will be able to make a more appropriate decision on which route to take, which may or may not involve ERP. By ensuring you have these 7 critical success factors in place, your organization will be much more likely to maximize the business benefits of ERP.