For modern businesses, an enterprise resource planning system is the ideal tool to help the company run more smoothly. ERPs can help you manage and integrate all your important business processes, including HR, sales, marketing, finance and more. With everything housed and accessible in one place, an ERP can save a lot of time and money—but only if it’s implemented properly.
Companies that choose to create their own ERP can be especially susceptible to common errors that may cause confusion and poor functionality—the opposite of an ERP’s intended purpose. To help you on your journey to building an ideal ERP, be sure to avoid these 15 mistakes noted by the members of Forbes Technology Council.
Limit or avoid ERP customizations. A “vanilla” technical implementation forces businesses to standardize back-office processes while maximizing out-of-the-box financial and resource analytic capabilities. Focus your technology innovation energy on applications and initiatives that differentiate your product, drive sales and add value for your customers. – Chris Purcell, PEMCO Mutual Insurance Company
2. Making Technology-Out Decisions
We’re in the fourth era of ERP systems, where we can move from spending most of our IT time patching and upgrading our on-premise systems to helping users adopt new capabilities in SaaS systems and continually transform their business processes. During this change, the user is your best friend. Think of all ERP decisions from the user-out, not from the tech-out. Start with a user-out evaluation process. – Christopher Lazzaro, Associated Electric Cooperative Inc.
3. Not Incorporating Automation And Data Analytics
There is a need for a holistic ERP system design that is self-driven and automated, captures the essence of consumer behavior and uses intelligent data analytics. This type of ERP system is modular and easily maintainable across multiple rollouts and can undertake new features and functionality. This creates an end-to-end supply chain that is profitable for both the users and the organization. – Samir Roshan, Nutanix Inc.
4. Failing To Capture Historical Institutional Knowledge
An operational pitfall is a budget that doesn’t consider the institutional knowledge of those who leave the firm or the cost and time in hiring future workers already technically capable of using the ERP system. Building a business intelligence module is key to developing a knowledge repository of what our most experienced personnel know about the business, clients and operations. – Robert Bona, AdvanTech, Inc.
5. Not Aligning Business Needs And Operational Goals
The main benefit of implementing an ERP is typically around automation and governance, making it easy to overlook the value of identifying alignment with business needs and operational goals. Take the time to gather requirements across departments and identify critical versus future-state. The critical reflects your current process while future-state requires change management policy to allow innovation. – Chris Shalchi, BigCommerce
6. Only Viewing ERP As An Asset Management Tool
ERP is thought of as a tool for managing assets and saving IT costs. However, a long-term goal ought to be achieving business process efficiency (through automation of administrative and operational processes) and stoking a spirit of innovation (by implementing them in customer-facing lines of business). Data captured from ERP tools should be processed further to inform business decisions. – Anand Mahurkar, Findability Sciences
7. Ignoring Opportunities To Re-Engineer Business Processes As You Build
Implementing ERP is the perfect time to re-engineer business processes in an organization. Find inefficient business processes and make them more efficient while implementing the ERP. Since ERP is one of the biggest investments an organization would make in their IT, use this chance to bring efficiency. – Komal Goyal, 6e Technologies
8. Trying To Fit Your Business To The ERP
Many businesses select the ERP then try and make it fit their business. What they should do is understand their business and map that to the available ERPs to find the one that best fits their business model with the least amount of customization. Then seek first to change the business process before changing the ERP. The business process change is hard initially but pays dividends later. – Richard Davis, Katalyst Data Management
9. Straying Too Far From Your Core Functionality
One common mistake more organizations make is trying to do too many things at the same time. ERPs are implemented in order to solve a problem. During implementation, team members start to add other asks into the mix that may not be the highest priority. A simple way to avoid this is to define the key problem before starting the implementation and staying true to solving only the high-priority issues – Tanvir Bhangoo, Freshii Inc.
10. Over-Dependence On ERP
Many organizations become overly dependent on their ERP systems. This can lead to a situation in which organizations are left in a state of ERP-paralysis when and if the systems are down or connections are lost. This is especially true during times of business contingency. – Tyler Ward, Infinite Group, Inc.
11. Failing To Define Workflow Processes For Each Department
It is important to ensure that all the departments in your company that will be working on the ERP system are part of your workflow decision. Unless the process of each division is defined and added to the workflow, an ERP system will not be fully successful. – Bhavna Juneja, Infinity, a Stamford Technology Company
12. Not Testing Your Proof Of Concept First
Start with a smaller scope—one department or one functional group. Focus on risk analysis in that small group with extensive documentation on lessons learned to ensure operational integrity. Identify the weakest links in the first phase. Change the deployment plan based on the lessons learned. Be ready for some surprises—the ERP system may not function as advertised during the sales cycle. – Das Vakamudi, Family Health Centers of San Diego
13. Overlooking Data Governance
Stop and think about all of the mission-critical reports that come out of an ERP. Budgets, financial reports and inventory data are three vital ERP items. However, these reports are useless or dangerously misleading if there is bad ERP data. Assign responsibility for testing and governing ERP data if you want to get quality output. – Nelson Cicchitto, Avatier Corporation
14. Underestimating The Required Time And Resources
Underestimating the time and resources needed for the success of the process is one of the most common mistakes when developing and implementing an ERP system. Estimating how much time and money you will need to reach your goals is crucial. If the estimation is hard for you to do, seek help. Do everything possible to know the exact cost of the endeavor before you start doing anything. – Daria Leshchenko, SupportYourApp Inc.
15. Excluding End-Users From The Decision-Making Process
Many organizations focus on getting buy-in from the leadership team. They forget about the key employees who will be using it the most. Engage stakeholders from all areas of the business, including operations, finance, HR, IT, logistics, etc. in every step of the process. It ensures that everyone is invested in finding and implementing the right ERP solution for everyone. – Thomas Griffin, OptinMonster
Article Provided By: Forbes
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