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13 common ERP mistakes and how to avoid making them

Jennifer Lonoff Schiff | March 28, 2012
Implementing an ERP system is among the most expensive, time-consuming and complicated tasks an IT department can take on. The potential for delays and unexpected expenses lurk around every corner. To help you avoid costly mistakes, CIO.com asked IT executives, ERP vendors and technology consultants to provide advice on how to avoid becoming an ERP horror story.

To solve this problem, Hoebler suggests creating a master list with all features, tracking usage, and periodically reviewing the list to determine which features are being used and which are the most helpful. "This knowledge catalog can [then] be used to train new employees, write test scripts, and assist with audit, compliance, and reporting requirements," he says.

ERP Mistake #4: Underestimating the time and resources required. "All companies grossly underestimate the time and resources required to implement a new ERP system," argues James Mallory, marketing director, e2b teknologies. How can you calculate the necessary time involved? "The time involved can be estimated by dividing the cost of the software by 100," he explains. "For example, $20,000 for software will take approximately 200 man-hours or five weeks to implement using a certified consultant. Double that number if you plan to self-implement with minimal professional assistance." In addition, Mallory stresses the importance of assigning a dedicated project manager.

ERP Mistake #5: Not having the right people on the team from the start . "Often times, organizations do not bring the right people together from the very start of an ERP implementation," says Beasley. "ERP implementation is one of the biggest projects an organization can undertake, and consequently, mistakes can be made and plans might get derailed if the right stakeholders are not involved in every aspect of the decision-making process," he points out. For example, many organizations focus on getting executive approval, instead of gathering key participants from across the organization, from finance, operations, manufacturing, purchasing, and the warehouse, in addition to IT. The benefit: employees who are actively engaged with the ERP implementation, who have an investment in getting it right, right from the start.

ERP Mistake #6: Not setting priorities ."When implementing an ERP system, the single most important thing one can do to minimize delays and accelerate time to completion is to reduce multitasking," says Yoav Ziv, vice president, Realization , a project management specialist. "People work much slower when they are juggling multiple tasks and constantly switching gears," he argues. Therefore, creating a priority system should be a top priority for IT managers. "The priority system should not only indicate when to do which tasks, but should also provide managers with the issues they need to resolve, per priority," he says. In addition, "ERP implementation managers need to implement a rigorous issue resolution process to act upon those signals and remove issues immediately in order to avoid delays."

ERP Mistake #7: Not investing in training and change management. "A lack of proper training is one of the most common reasons that ERP projects fail, and it can also result in employees resenting the new system because they don't understand it," explains Kaas. "Making sure employees have a chance to become comfortable with the new system before it goes live will do wonders for your chances at ERP success." Adds Kevin Herrig, president and CEO of GSI, an ERP software specialist with a primary focus on Oracle's JD Edwards products: "If you don't make training and frequent communication with users a top priority, you will end up owning a very expensive version of Excel."

 

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