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ENTERPRISE RESOURCE PLANNING EXECUTIVE GUIDE  



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AN EXECUTIVE'S GUIDE TO ERP SOFTWARE SYSTEMS

crm ERP SOFTWARE PITFALLS
While the benefits are proven, Enterprise Resource Planning (ERP) software systems are not a panacea and prone to pitfalls if not carefully managed. Common application pitfalls include the following:

  • The technical difficulty in implementing, upgrading and managing ERP software systems can be complex. ERP implementation failures have become commonplace and cast a dark shadow on the ERP software applications as well as the IT staff who implement them.
  • Compromises which reduce flexibility may have to be made. Since all departments are using the same information system, there may be cases where a lowest common denominator approach is required or appropriate.
  • The cascading effect of bad data or broken processes can cripple an ERP system. While everybody knows garbage in, garbage out (GIGO), with ERP you must also recognize that if any department enters incorrect data or inaccurate information, all downstream enterprise information users may suffer.
  • ERP imposes company change. While change is of course not necessarily negative, change often induces resistance and big change can bring panic. ERP normally imposes big change to a company. Delays or errors that were once not outside a user or department’s purview now invite company-wide visibility, questioning and demands for accountability.
  • The hidden costs of implementing and operating ERP systems frequently exceed planned investment, predetermined budgets and forecasted ROI. The most common hidden costs include the following:
    • Data conversion. Few companies discover their data is of poor quality before attempting to convert that data to the new system. Once poor data quality is verified, a time consuming data cleaning process must be completed before the data can be converted.
    • IT labor. Many companies underestimate the number of internal IT or technical resources required to administrate and manage locally installed ERP applications.
    • Upgrades. Most companies misjudge the effort and cost associated with new version upgrades. This recurring expense occurs on average every 20 months and is often the most material hidden cost encountered. Previously performed system integration or software customization is generally impacted with each new version release.
    • Training. For various reasons, project teams habitually under-budget training programs during the initial implementation and often completely leave out the recurring training programs needed for refresher training, advanced training, training for new-hires and training after each new version upgrade.

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crm A RECENT UPDATE (MORE OF THE SAME)
While the implementation failure rates for ERP applications continue to be unacceptably high, they have slowly but steadily declined in recent years. Nonetheless, while these implementation failure rates inch down, the percentage of companies achieving post-implementation success remains alarming low.

In a 2008 survey of 118 companies, less than 9 percent indicated they reached all their primary ERP software objectives. Approximately 19 percent indicated they reached most of their primary business objectives and over half indicated their objectives appear elusive. Clearly the concepts of implementation success (e.g. simply getting the application software to a production environment) and post-implementation success (achieving forecasted business objectives) remain difficult and mutually exclusive.

 

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On Demand ERP Systems  

ERP Software Pitfalls

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ERP software systems integrate:
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Accounting software systems

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Distribution systems
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Manufacturing applications
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Human Resource systems
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Payroll applications
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CRM software systems
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tags Tags:
erp problems
accounting software problems, erp software, enterprise resource planning software pitfalls, crm, hidden costs, tco, sap, accounting software, business software training

 

 

 

 

 

 

 

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