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Why Do ERP Implementations Fail?

Ray Rebello | May 16, 2017

Choosing to upgrade or purchase cloud-based ERP technology is a necessary step for growing your business in today’s competitive market. Once you select the ERP system software and provider, the specter of ERP implementations – and the possibility of failure – becomes a factor. The good news is that the right cloud-based ERP provider along with the proper steps can alleviate failure and point your business in the direction of growth.

ERP implementation failures tend to draw headlines when big-name companies experience operational problems (inability to ship product, unexpected shortages, difficulty in handling orders) right after a system change, and the inevitable accusations and lawsuits work their way through the court system. Rumor mills are also rife with reports of ERP implementations failing to the extent that one might think that failure is a rather common occurrence. The truth is that failures are actually quite rare, but their impact can be devastating to the company involved.

What is more common is a company that fails to achieve the full benefits the ERP system software was expected to provide. And the wording of that sentence hints at one of the leading causes of disappointment. ERP system software is a tool. ERP technology by itself will not necessarily improve company performance, reduce inventory, increase customer service or relieve chaos on the plant floor: it takes people and process combined with the ERP technology to make a difference in company performance. Those elements must come together during the implementation process.

Why Do ERP Implementations Fail

ERP implementations don’t fail when leadership, teamwork, and communication come into play

An ERP implementation is a project and must be planned and managed like any other project. It takes a strong, dedicated, cross-functional project team with good leadership to organize and manage the project and successfully implement the ERP system software. More importantly, the team helps the users learn about the new system and ERP technology along with how it helps the users perform their day-to-day tasks and duties. The new ERP system software will change the way they do things and will make much more information available to assist them in completing their duties so they must understand and be comfortable with those changes.

ERP implementations also need a strong executive champion to be successful. That executive has the vision to see how the ERP system software will enable the business to grow, improve, and bring that vision to the rest of the executive team and company directors – who with this vision in mind – will allocate the resources necessary for success. The executive will also continue to show leadership and inspiration to the company as a whole to keep the importance of the project front-of-mind through all levels of the organization.

The absence – or inadequacy – of any of these elements can be the root cause of failure – that is, failure to achieve the potential that ERP system software and ERP technology can provide. And, oh yeah, the chosen ERP system software must be the right software for the company’s industry and specific needs. But that isn’t usually an issue – most companies do a pretty thorough and satisfactory job of choosing the right system.

The right ERP technology provider and implementation partners = successful ERP implementations

Take for instance smartTrade Technologies, a software company that develops solutions for streamlining trading processes and execution services for the investment banking, exchange, and hedge fund industries. The company required an advanced financial management system to handle multiple markets and multiple currency growth. After examining various ERP system software options, the France-based company chose Acumatica for our advanced features, robust cloud platform, flexible customization, competitive pricing, and bilingual (French-English) capabilities.

“As software developers, we found Acumatica’s technology to be elegant, adaptable, and stable,” says Auri Kostama, Head of Finance & Administration.

When it came time to implement the ERP system software, the company partnered with Acumatica Gold Certified Partner SiPD, located in Montreal, Quebec. The time difference and distance between the collaborators didn’t affect their ability to implement the ERP technology successfully.

Kostama states, “Acumatica’s partner, Les Services SiPD, has always addressed our concerns quickly and in a caring manner. Although they are a continent away, the cloud has brought us together so we feel we know them as if they were located across the street.”

Because the team at smartTrade Technologies took the time to research their ERP technology provider options and chose the right one for them, they experienced an efficient and effective ERP implementation. Read more of their success story with Acumatica.

Why do ERP implementations fail?

The answer is simple: don’t do your homework and don’t work as a team. So this means if you do research the multiple ERP systems on the market, choose the correct provider/ implementation partner for your company, treat the ERP system software as a tool, allocate a champion of the system, and make it a company-wide project with all users on board and informed, you will be able to successfully implement your ERP technology.

We’d love to accompany you on your ERP implementation journey. Contact us directly or check out this information available here to jumpstart your trip.

Your Journey in ERP

Ray Rebello

Director of Product Marketing at Acumatica

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