Hardfacts on Software – More cardinal sins of ERP implementation
We started looking at Richard G. Ligus list of 12 Cardinal sins of ERP implementation last week. I had found a very good white paper online, published originally by Richard G. Ligus of the Rockford Consulting Group, and since widely referenced online. Here are more of those sins:
(4) Inadequate Resources
The fourth greatest reason for ERP implementation failures is inadequate resources. Many companies will attempt to “save dollars” by doing everything on an overtime basis, whether or not there are adequate skills within the company, extending individual work loads to 150%. This approach can be a “kiss of death” for the programme. Time and time again we run across this mistake in ERP implementations. The financial and emotional drain of what seems sometimes to be perpetual extensions, reschedules and delays of implementations takes its toll. People burn out after having put in extensive hours over a long period of time.
(5) Resistance to Change/Lack of Buy-in
The lack of a change management approach as part of the programme can prevent a programme from succeeding. Resistance to change is quite often caused by (1) A failure to build a case for change, (2) Lack of involvement by those responsible for working with changed processes (3) Inadequate communication (4) Lack of visible top management support and commitment, and (5) Arrogance. A lack of buy-in often results from not getting end-users involved in the project from the very start, thereby negating their authorship and ownership of the new system and processes.
(6) Miscalculation of Time and Effort
Another cause of ERP implementation failure is the miscalculation of effort and time it will take to accomplish the project. Companies who treat an ERP selection, evaluation and implementation comparable to buying a washing machine are doomed to failure.
(7) Misfit of Application Software with Business Processes
One of the main causes of ERP implementation failure is the misfit of application software with the company business processes. This failure to examine underlying business process flaws, and integrate the applications with the business processes, causes loss of productivity and time, and ultimate benefits.
(8) Unrealistic Expectation of Benefits and ROI
Another significant cause for ERP implementation failure is the unrealistic expectation of benefits and return on investment. Software providers are notorious for overstating the benefits in terms of ROI, when the total costs of the project have been understated. Often left out of the total costs are costs of planning, consulting fees, training, testing, data conversions, documentation, replacement staffing, and the learning curve performance drop. When this happens, a company doesn’t stand a chance of achieving the ROI it anticipated.
You will ask yourself – are all IT projects as complex as this? Definitely no! For example – we recently started a new division – www.icommerce-sa.co.za where we are a Magento Gold partner, helping corporations and small businesses setup their e-commerce strategy. We build online shopping sites that are fun and colourfull and that open up a new sales channel for our customers. It is not a rip and replace effort, and hence change and training are much less of an issue. So these are much easier projects to handle for any business. The problem with ERP is that it changes too much in the organisation and it expects so much of the organisation, such as the abliity to adapt and change to a new culture, the ability to see long term ROI projections and to stick to the vision especially when the going gets tough. So to be prepared – lets look at the last sins on the list next time!
Until next time then – remember – Keep it (A)fresh