Integrating a new ERP system into an existing network is one of the most complicated, tiresome, and costly tasks any IT department can undertake. In addition to costly expenses, there is a persistent potential for delays which can contribute to a reduction in overall income. In order to avoid these errors, CIO.com asked IT executives, ERP technology professionals, and ERP vendors to provide some advice on avoiding mistakes regarding this matter; this article will relay their information.
Despite the fact that successful implementation of enterprise resource planning (ERP) systems can be money-saving tools; the implementation does require an excessive amount of initial finance to purchase the ERP system and manpower to implement it. It should also be noted that in addition to saving money, an ERP system can increase workflow and productivity; however, poorly planned procedures can actually result in lost productivity and low profitability.
To ensure that your implementation is successful, or to at least reduce potential errors, CIO.com surveyed ERP experts enquiring about the most common ERP-related mistakes and how to fix them:
1. Not Vetting The ERP Venders Correctly
Many clients are often ‘sold’ by a company’s marketing team and promised a service greater than the one received. Once implementations have been completed, clients will often be prepared for exciting systems; however, they will receive restricted functions, a lack of capabilities, and poor practice. According to Shawn Casemore, president of Casemore & Co., it is important to vet the vendors correctly beforehand by requesting the names of at least three companies who can act as references. The references must be within the business sector, must be contactable, and can discuss the features, functions and challenges of the system. Casemore believes that if the vendor won’t provide at least three names you should “walk away”, unless you want to be a guinea pig.
2. Not Using An Active Load Testing Environment
A great disadvantage to ERP system implementation is that a small amount of test users will utilize the system; thus, it is impossible to determine true results regarding the system’s full abilities. In order to see the full, real-world effect, it is necessary to use an active user load with full stimulation. It may be questioned why this is necessary; however, if this is not completed the system will not be created to combat potential difficulties in the real world (Microsoft Dynamics AX testing is essential), which will lead to downtime if experienced.
3. Avoiding Third-Party Support
Jon Winsett – CEO of the IT consultancy company NCI – points out that the majority of businesses will insist on premium ERP vender support in order to achieve the highest quality service; irrespective of the fact that all third-part support organizations provide the same type of service. It is found that psychological factors play a role in believing that a higher level support provider will present higher quality support, but Winsett argues that it may be worthwhile exploring alternate options ranging from hybrid support who work directly with the vendor to independent providers. This can be highly beneficial in not only the interaction, but also as a reduction in overall expenditure.
4. Not Decommissioning Legacy Applications
John Picciotto – a principal of Application, Modernization & Optimization at Accenture – points out applications that are not actively decommissioned during implementation will more often than not result in an ERP with an original legacy application. This means that you will be paying for not only the ERP implemented system but also the additional application hardware, including maintenance and support, upgrades, and interfaces. This is a drawback as the primary aim of ERP implementation is to reduce costs and increase productivity without waste.
5. Ignoring A Maintenance Strategy
Maintenance is an important aspect of business management and development, and ERP system implementation is a manner of promoting maintenance strategies. The vice president of North America & Latin America SAP America Inc. stated that ERP systems are investments that assist as preventative maintenance for customers and their dollars. By not applying this maintenance, Marco Valencia (the vice president) pointed out that systems will become technically obsolete and the business will face difficulties in software improvements; which will ultimately lead to a loss in productivity and profitability.