Enterprise resource planning systems play a vital role in the digital workplace, providing a centralized system for tracking and managing a variety of processes. They often act as the “single source of truth” for the disparate teams in an organization, helping to avoid data silos and ensuring everyone has access to updated, essential information.
Because of its high importance, it’s especially important to get the implementation of a new ERP system right. However, it’s a task that can come with multiple complications. Below, 17 members of Forbes Technology Council detail common challenges that come with the implementation of new ERP systems and how they can be overcome.
1. Fear Of The Cost And Effort
There is an old saying: Fail to plan; plan to fail. Often, a project will seem “too big” or “too expensive.” The company leaders know they need to do it, but they are afraid they do not have the time, money or resources. So instead of planning for it, they do nothing. The first thing every company should do is establish a plan, and then break it down into manageable phases so they can accomplish the project. – Leigh White, Myriad Advisor Solutions
2. Establishing A Compelling Business Case
Without a strong implementation strategy, switching to a new ERP system can be a drain on company resources. It’s important to establish a compelling business case for the ERP project from the start—one that demonstrates positive ROI and KPIs that accurately measure all impacted business processes. In other words, the set of requirements needed is probably more than you originally anticipated. – Steve Murphy, Epicor
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3. Historical Objections
In my experience, the biggest challenge is the historical objection—“That’s not how we’ve always done it” or, “This is how we’ve always done it.” This type of objection is often hard to overcome. Help end users become familiar with the new ERP by exposing them to learning resources and assuring them that help is available whenever it’s needed. – Robert Martin, Oil City Iron Works, Inc.
4. Gathering Input From All Stakeholders
Communication from all departments and roles is crucial. We have seen too many ERP implementations drag on or run out of funds because all the stakeholders were not included or on board in the planning discussions. More effort up front will relieve pressure during the process. This is a big task for smaller, budget-conscious companies, and proper scoping is a key component. – Robert Giannini, GiaSpace Inc.
5. Calculating The ROI And Lifespan
An ERP system is mission-critical, but it’s not strategic for most companies. In this context, a major hindrance is anticipating the ROI and lifespan of the ERP system, alongside interoperability and integration. At its core, this is the real challenge: future-proofing the implementation to ensure systems of record continue to work seamlessly with the new technologies being adopted. – Seth Ravin, Rimini Street
6. Managing The Costs Of Implementation
ERP updates are costly, as features are added and systems are sunset, forcing businesses to reimplement at a significant cost. This benefits ERP vendors financially but may not result in a positive ROI for businesses. To mitigate costs, remain on your legacy ERP system, with another vendor providing support. Also, use digital and AI transformations to add functionality, cut costs and gain a competitive edge. – Alex Collevecchio, EvAIntel Group
7. Unclear Business Processes
One common challenge in ERP implementation is unclear written business processes. To mitigate this challenge, businesses should conduct thorough process mapping before implementation. This involves documenting current processes, identifying gaps and defining desired workflows. Regular communication and training and involving stakeholders throughout the process ensure alignment and clarity. – Prabhu Patil, PROLIM Global Corporation
8. Resistance To Change
A common challenge is the resistance to change among employees. This can occur due to concerns about workflow disruptions, job security or unfamiliarity with new systems. By involving employees early in the process, addressing their concerns transparently and providing adequate support, businesses can ease the transition and create a more positive reception for the new ERP. – Kirimgeray Kirimli, Flatiron Software Corporation
9. Standardizing And Formalizing Workflows
Perhaps the most common challenge is the need to standardize and formalize business workflows, procedures and processes. It takes a lot of effort from both the customer and the vendor to harmonize their approach and clarify the mission, scope and overall expectations of the new ERP system. ERP implementation requires a certain level of organizational maturity, managerial will and readiness to adopt changes. – Sipan Vardanyan, Hexens
10. Trying To Replicate The Old System
There is often a temptation to make the new system work like the old one. This leads to customizations, which can impede future upgrades and the ability to take full advantage of advancements such as built-in AI. Stay as close to out-of-the-box functionality as possible. Establishing a steering committee to provide the governance and critical eye necessary to vet any proposed changes will help you maintain control. – Claire Rutkowski, POWER Engineers
11. Creating A Clear Roadmap
It’s essential to establish clear business requirements, understand the new system and minimize disruptions. Avoiding redundant new features, ensuring accurate data migration and cleansing, and team collaboration are key measures. Early staff engagement, change communication, training and a clear explanation of the new system’s benefits are crucial. Engaging stakeholders with a clear roadmap boosts confidence and helps everyone handle the transition successfully, overcoming resistance. – Narender Chinthamu, WESCO International
12. Data Mapping And Anomaly Detection
Data migration in ERP implementations demands meticulous cleansing and validation for seamless integration. Leverage AI and automation for efficient data mapping and anomaly detection. Success relies on a team combining technical know-how with business understanding, bolstered by clear communication and strong leadership commitment. Recognizing the significant organizational change is essential. – Monica Hernandez, MAS Global
13. Complexity Caused By Customization
Resist the temptation to customize! Large, complex ERP platforms are best implemented with out-of-the-box functionality and basic configuration. Any unique needs related to ERP data should be developed in an agile software as a service layer. This is easily accomplished with a digital data layer in between your ERP and agile SaaS layer. – Kerrie Hoffman, Hoffman Digital
14. Errors Caused By Incomplete Or Inaccurate Data
One major ERP challenge is data migration. Errors in the new ERP may result from incomplete or inaccurate data that’s been imported from outdated systems. Businesses can invest in quality checks and data purification before migration to reduce the chance of such errors. This guarantees a seamless transfer and accurate data in the new system. – Jas Bagga, Abusiness LLC
15. The Extra Work During The Transition
Implementing a new ERP system often means asking employees to do extra work during the transition period on top of their day jobs, which can create resistance. Companies can mitigate this challenge by adding “change management milestones” into employees’ quarterly and annual objectives and performance metrics. This helps employees get credit for the work they do that’s associated with the ERP implementation. – Edmund Zagorin, Arkestro
16. Disparate Impacts On Team Members
A significant challenge in large back-office transformations is the disparate impact the new solution has on various roles across the company. Executives are part of the sales process and see the benefits of the new features; however, the people most affected by the change—the daily users—have often not bought into the new solution’s value, yet are the most impacted. Communication from the start will help everyone understand the need for change. – Lou Senko, Q2
17. Choosing The Right Vendor
Usually, ERP vendors promise the whole world, making selection challenging. Conduct deep research, define clear selection criteria that are aligned with business needs, involve key stakeholders in the evaluation process, and request detailed proposals from all potential vendors. In addition, conducting reference checks and negotiating contracts effectively can help ensure a successful partnership. – Dr. Suresh Rajappa, KPMG LLP