ERP consists of developing a software system that helps your company to integrate functions that are at times diverse, such as tracking, allocate resources and data, and communicating effectively within or outside the company with external stakeholders. ERP projects are expensive, in the terms of financial resources and period. In order to implement an ERP as effectively as possible, factors for success and failure need to be understood. Following are the key factors that are considered to be crucial for the apt implementation of ERP within any organizational system.
Business Goals and Objectives
Prior to attempting to implement an ERP, specify exactly whether and how an ERP can help you achieve your business goals. ERP consultant Eric Kimberling states that one of the most significant factors in the process is understanding why your company needs to go for the implementation of an ERP1. Even though other companies do it or because many other organizations had also experienced it first-hand and have gained enormous success will not be authentic reasons to come up with the idea of ERP implementation. Each organization has a unique culture, as well as other possibilities that can more efficiently and less costly serve your needs and goals. Due to this, the organizations need to be aware of the goals and objectives they are being tried to target by using this ERP system.
Another of the major factors for ERPs’ success or failure is the financial and time resources of the business. A thorough spending document that outlines the funds for the purchase and execution of the ERP is required. Although at this stage you are not required to prepare an official budget plan but drawing up a rough draft should help the company to manage the expenses more wisely. Other than that, the company should also need to draw up a comprehensive timeline knowing that the implementation of an ERP might take a certain period of time whether it be 12 months or more than 2 years.
Teamwork and Employee Engagement
The success of an ERP system is dependent on the collaboration of its users (those are the employees of course). To successfully implement an ERP system, the organization’s project coordinator and team members should be well-versed about the goals, and expectations of the business. They must also be able to identify, manage and complete the necessary background preparations for the implementation of the system. This team must also be able to collaborate and communicate effectively with one another, with managers, executives, external shareholders, and with the company that is providing the ERP. Your ERP system implementation group should be made up of the most talented employees from across the organization. These would be the outperformers of the organization, the people who are intimately familiar with operational programs. These resources should demonstrate an ability to comprehend the overall requirements of the organization and should be entrusted with critical decision-making responsibility and authority in order to succeed.
All staff members must always be informed on how the ERP system will assist the company in reaching its full potential. This involves recognizing how much an ERP system seems to be contributed to reaching organizational objectives, how it works, and how it is used properly. Employees’ technical ability to use the ERP will be undermined if they do not have this knowledge. Individuals must therefore begin receiving specialized training tailored to their specific job responsibilities. End-user training should begin as early as possible, preferably before the solution is implemented, in order to ensure its success. This is especially true for skills that will help users better implement and utilize the solution. Senior managers frequently undervalue the level of knowledge and skills required to implement an ERP system, and also the costs associated with such a system deployment. Senior management is always absolutely dedicated to including the cost of training in the ERP budget.
Selection of Reliable Partner
The ERP implementation process will fail if the corporation’s employers and supervisors do not express their commitment and support in advance of the implementation. Yet again, effective communication is critical to the success of an ERP. The ERP system must be understood by the company’s executives in order for the organization to achieve its objectives. Furthermore, they must assist the team members throughout the implementation process. Managers must consider communicating with the employees that the ERP will assist them in performing their duties, but that it will not replace them. Employees will be more willing to promise their trust and involvement in a project if they feel secure in their current positions.
Be sure to clearly define your company’s goals, as well as whether and how an ERP can assist you in achieving them, before moving forward with the implementation process. Understanding why your company is implementing an ERP system in the first place is crucial to the process. It is not sufficient justification to do something because other businesses are doing it or because other businesses have found it useful in the past. Considering that every company is different, other options may be more effective and less expensive in meeting your needs and achieving your goals than what you currently have. A large number of moving parts are involved in ERP implementations, particularly for consumer brand companies, and these factors have an impact on every aspect of the organization. Working with a partner who understands your industry as well as they do the software is recommended to help monitor and guide the success of your project.