ERP Implementation: Why does it sometimes fail? / Common factors of failure of ERP implementation

There are a few factors that determine whether an ERP project succeeds or fails. Poor planning, a lack of consultant or function specialist, a disorganized structure and a variety of other factors can cause ERP failure. Lack of information, research and lack of visibility also leads to ERP deployment failure, as the system is unable to identify errors.

It will be easier to implement ERP successfully if we can avoid these few issues while we implement an ERP.

Poor planning- A well organized implementation can define project goals that are relevant to client needs without effective planning. ERP is seen by many companies as a challenge for their business. If companies want to overcome these challenges before making the implementation, planning must have the well-defined-objectives. Well-defined planning may reduce error rate, standardize workflows and better service quality. Also the communication between customer and vendor should be regular. Regular communication has the goal of reducing ambiguity, negativity and other obstacles which might arise from irregular communication. Here poor planning could be a common factor of failure of implementation.

Lack of consultant- An ERP consultant ensures that the organization understands ERP in order to optimize the business process. Without a clearer understanding of ERP, the system stands to lose valuable data and cloud security. An experienced ERP consultant has the capacity to recognize a client's business requirements and determine whether or not an implementation is appropriate. In the case of installing an ERP, there is a high risk of failure if the business requirements are not properly understood.

Disorganized structure- Unorganized structural strategy has a significant influence on business processes and can lead to technology and decision making mismatch. Organizations hierarchy have to be clearly defined for effective ERP implementation otherwise implementation could be failed as result. Without successful implementation of an ERP, it’s quite difficult to show complete visibility into core business processes.

Insufficient resources- One of the most vital elements of an implementation is availability of resources. A sufficient number of resources has the potential to carry out the project successfully. If the organization somehow doesn’t allocate the resources essential for success, ERP deployment will fail. The organization resources must be available to the team who works for the implementation.

Lack of testing- Testing exposes the implementation flaw. For a limited time, a lack of testing may result in fewer mistakes. But in further implementation it creates a huge hassle. Testing is a method of detecting problems that might increase efficiency. Lack of testing increases the risk of failure of ERP implementation where proper testing increases the chances of successful implementation.

Unsatisfactory investment, improper requirements, lack of quality decisions, and other issues are some of the most common causes of ERP implementation. By avoiding the terminology described above, you may be able to have successful ERP deployment. A successful ERP implementation could maximize your business efficiency with minimize the potential errors.