Top 10 Common ERP Mistakes and How to Avoid Them

The concept of Enterprise resource planning systems came into existence for eliminating inefficiencies and miscommunication-related issues in organizations. The old inefficient processes are also evolved during the analysis because an ERP designed to perform inefficient processes will still be inefficient. However, decision-makers feel overwhelmed by dazzling new features offered by different ERP solution providers which often leads them to make wrong decisions on vague fundamentals.

How to Avoid 10 Common ERP Implementation Mistakes?

This blog intends to help them with a simplified matrix of bullet-pointed issues which can be focused upon to develop an ERP solution that delivers best-in-class business value. So, without further a due let’s get started.

1. Not setting up clear business goals

ERP solution development is a complex process hence we should dive into the problem layer by layer. On the topmost level business owners should determine the business goals which they wish to achieve with their custom ERP solution and what are the prevailing inefficiencies in their organisation which they wish to eliminate.

2. Not cleansing data according to decide business goals

Now the second step would be to analyse the previously collected data by organization which can be helpful in delivering the business goal quickly or at least help with a valid proof of concept. Once such a scenario is recognized the data can be cleansed and transformed according to the planned design of the ERP solution.

3. Not gathering requirements completely

ERP solutions are extremely dependent on the detailed functioning and process flow of an organization so it is the responsibility of business stakeholders to provide a detailed description to business analysts about every processing flow followed in the organization. Now it is the responsibility of business analysts to translate these process flows into diagrams and map the gaps in these process flows. A good business analyst can simply do this with business process modeling diagrams and propose a better process flow to business stakeholders with which these gaps can be followed.

BPMN tools with RPA (robotic process automation) can be used to design proposed steps in diagrams which can be translated into a simulation with RPA that generates a report. Such system-generated reports are helpful for decision-makers to make calculative decisions because now they know a projection of how much time and effort can be saved with suggested tweaks in process flow without even implementing the change. It must be noted that filling these process flow gaps is crucial because it is the core foundation for implementing an efficient process for organization. So, the design of ERP solutions should only begin after a mutual agreement is achieved on a list of steps to follow for filling out process flow gaps.

4. Not having the participation of the right stakeholders

ERP solutions are designed to help employees so that a large number of wasteful efforts can be saved but one of the biggest mistakes organizations make is not involving these people in the requirement gathering phase of custom ERP solution development. The business owners should understand that employees working at every hierarchy are repetitively doing their jobs every day so they better know the Achilles heel of processes implemented in their organization. Hence from every business process, stakeholders should be chosen who know the business process inside out should be introduced with the appointed business analyst on that project.

5. Not implying design thinking principles

The design thinking principles are simple i.e., empathize, define, ideate, prototype and test. The solution of the problem is developed after analysis and evaluation in iterations where improvements are suggested after analyzing the solution that was developed previously.

Although some business goals were determined in the first step by business owners after pursuing the thorough step-by-step analysis reports suggest that developing a solution to solve a problem will be costlier than the prevailing inefficiency then that problem should be left out as it is. Some problems could be of nature where the end-user isn’t bothered much by a problem and does not want it to be solved.

6. Overcomplicating ERP solutions

The dazzling set of features currently available in the market woo anyone but you must understand that those features come at a price and why it would be a wise decision to spend money on features that aren’t useful for you. The Pareto principle (80-20 rule) pours quite a sense into this context which suggests 80% of features deliver 20% value and 20% features deliver 80% business value so you should set you should spend money accordingly. Another problem is that the overcomplicated user interface and functionalities of these ERP systems start eating up employees’ time while operating them hence you should keep it stupid simple.

7. Not designing industry-specific ERP

Not having the industry-specific ERP solution will overcomplicate the submission of process flow entries for your employees and they might not switch to this newly improved process. So instead of annoying them with an over-complicated ERP solution, you should find a software solution provider who offers your industry-specific ERP solution else you can turn towards a custom ERP solution development company. A prebuilt ERP solution can never out beat the software that is specifically custom-built for your business.

8. Ignoring change management

Change management is a crucial part of ERP development because the business value with an ERP will be delivered only if the changes are reflected within people, technology and processes across the organisation. Although managers are required in every department to imply such changes, some of the implementations can be enforced through ERP by coupling it with automation.

9. Not leaving room for agility and nimbleness in ERP

Business process flows are always under transition to leverage new technological breakthroughs and process gap findings hence the architecture of an ERP should be agile and nimble. The ERP solution should be easily integrable with new modules, third-party tools and enhancement of existing modules.

10. Not investing properly in the development and maintenance of ERP

The development of an ERP solution is an extremely complicated process where even the functionality roadmap cannot be predicted clearly so forget the idea that one can perfectly predict the cost of development and maintenance cost on a project of such nature. We would rather recommend that one should build simple functionalities in ERP which deliver high business value at first and keep on resolving the issues of less priority in the latter phase.

To sum up, all the recommendations that we have gathered with our experience are that the business world is volatile, uncertain, complex and ambiguous so if the businesses have a sufficient budget then they should go for custom ERP development in multiple iterations. Such custom ERP solutions are developed in the first phase to deliver maximum business value for an organization but even if the assumptions of the first phase turn out to be wrong businesses have the room to make improvements in later phases whereas with service providers they will be left out and hung dry. The development of custom ERP can be stopped if they do not deliver business value so your technology provider will pour more effort into keeping this project alive. The quality of a custom ERP solution will always be derived from the decisions of business owners hence the organization will excel in every aspect.