Why ERP Fails?

In the previous few years we now have all heard a number of statements about failed ERP implementations. Some consultants state that 50% of ERP projects fail. Frankly, I believe that number is overstated. Having stated that, I believe there may be fact within the statement that ERP implementation projects usually fail to fulfill management’s expectations.

So Why Does ERP Fail?

Again we ask, why is this?

• Is it tougher than you suppose?
• Do the distributors make it look to simple?
• Are the consumers too naïve?
• Do the distributors oversell?
• Do the ERP selection groups and the ERP implementation groups fail to take all the mandatory steps to achieve success?

The reply to all these questions is sure! This implies that everybody concerned in these tasks has made errors. But the one factor everybody has in frequent is — as a bunch all of them didn’t set the correct expectation.

In our interviews and surveys with manufacturing corporations which have gone via an ERP implementation we hear some common comments:

• I didn’t suppose it could be this tough
• We made some errors
• I’d have carried out it in a different way

What we be taught is that expectations weren’t set correctly up front.

What about software program? We typically hear the SAP stories or some firm simply threw out the ERP vendor as a result of it didn’t work. ERP system works. All of those ERP distributors have 1000’s of users utilizing their software, so it’s not a software drawback. But if we dissect every of those issues we proceed to see a standard failure — setting expectations.

So How Do You Properly Set ERP Expectations?

As you propose your ERP project you’ll want to answer these questions:

• What will a brand new system price?
• How lengthy will it take to pick out and implement?
• Who will probably be on our crew and what effort is required?
• What are the prices to implement and the ongoing price of possession?
• What is the profit to be achieved and when will or not it’s realized?

Consider the solutions to those inquiries to be the expectations.

The answers to those questions will change and can change into more clear as you do your planning and due diligence on the challenge.

The answers will fluctuate from firm to firm. There isn’t any normal answer. The variables will probably be software scope, company organization, users, your project crew, and vendor chosen.

There a lot of sources for enter to your plan. The primary sources are ERP vendors, unbiased ERP selection consultants, and clients of ERP products being thought-about. The more sources you question, the more knowledge factors you’ll have to set up the expectation.

Your vendor analysis process ought to embrace an ongoing evaluate of those expectations. They will change as you achieve more data and also you do more due diligence.