Are these pitfalls preventing you from maximising your ERP investment?
- Posted on January 23, 2020
- Estimated reading time 3 minutes
This article was originally written by Avanade alum Martin Burden.
Here’s a scenario for you. An organisation invests in a suite of new business applications to modernise its Finance and Operations. The business case promises the earth: Stellar efficiencies, jaw-dropping cost-savings and deliriously happy customers.
But, soon, all is not as it seems. Roll forward three years and the same shiny (once) new systems and interfaces are up and running. But those long-promised benefits are nowhere to be seen.
Sound familiar? You’re not alone.
Organisations across the world are finding it tough to realise the promised advantages of expensive ERP systems.
Things don’t need to be this way.
I believe there are four common (and understandable) mistakes that lead to ERP disappointment. So, here’s my guide to identifying them and, most importantly, avoiding them.
Pitfall #1 – setting unrealistic expectations
I come across this time and time again. Big numbers grab the attention of the board, but inflated expectations lead to major disappointments down the line.
Business application change isn’t an additive service – it’s central to every business. But overemphasising the impact it can deliver creates problems. Instead, build a realistic business case and don’t oversell the tangible (and financial) benefits.
Pitfall #2 – dismissing business apps as “just an IT project”
Today, every business is a digital business. So, any change to a business application is a change that needs to be supported by IT. But that doesn’t mean a business application deployment is solely an IT project.
Core business stakeholders should, on an ongoing basis, be assessing (and re-assessing) business processes and business efficiencies. Unfortunately, too few organisations do this.
Many teams have an initial go-live date, take a deep breath and don’t come back to review the investment made. The deployment is only the first step. It’s imperative that significant fine-tuning and development follows. So, why do organisations feel that once a system is live, all the work is done? In most cases, it’s just the beginning.
Pitfall #3 – overestimating how much you can do alone
There are multiple moving parts and important considerations if you’re to maximise your ERP investment. It’s a lot for you to cover on your own, so it’s crucial you find a partner that complements your organisation.
Getting that right means being honest about your capabilities. If your organisation has experience in delivering significant change management (and you’re completely confident that you can manage it) then a pureplay technology partner is a good fit for you. And if you can, congratulations – because most organisations aren’t able to do that.
But if, like most of your peers, you’re not able to achieve this, consider a partner that has access to wider advisory, change management and business consulting experience, which you can call on to support your journey to success.
Often, benefits are not realised because an organisation doesn’t understand or have the skills to maximise an ERP investment on its own.
Pitfall #4 – underinvesting
Don’t be sold on the quickest or cheapest option. Most organisations I’ve worked with underestimate the investment needed for project to succeed. Corners are cut and the investment required to recognise future value is lost through hastily implemented cost-trimming exercises.
Make sure you fully understand the investments necessary to get the benefits you’re demanding. Always consider the external and internal costs, not just those that relate to the technology.
Invest well beyond the go-live date. Your systems will need to be constantly optimised and improved once they’re switched on. Going this “extra mile” is often seen as a nice-to-have. The reality? It’s a can’t-do-without.
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