ERP implementations fail miserably during the initial stages of the operational phase itself or fail to deliver the promised benefits. Why does this happen? Given below are some of the most common reasons:

1.    Lack of top management buy-in, commitment and support
2.    Improper planning and budgeting
3.    Use of wrong ERP tool
4.    Lack of training
5.    Work culture of the organization

The top management must be clearly convinced about the importance ERP and how ERP could be used as a competitive weapon and how the company can fail if an ERP system is not available to manage and control the business operations. If the management is aware of the potential benefits of ERP and dangers of not having an ERP system, it will give the full backing and necessary organizational resources to implement the best system possible.

Before stating the ERP implementation project, detailed planning involving all the major stakeholders is necessary for the success of the project. It is during this phase that the decision’ regarding procedures to be followed, tool to be bought, the bulged to be allocated for implementation and maintenance, etc. are decided. If this planning is not properly, then there is every change that many factors would be overlooked resulting in selecting the wrong tool, insufficient funds, and inadequate team members and so on.

We have seen that no two organizations are the same and each organization requires an ERP tool that is best suited for its organizational environment, work culture and procedures. So the ERP planning team should take into account all these factors before deciding on a tool. They should research the available tools, match them with the organization’s requirements, visit companies where the tools are installed to see them in action, should discuss about end-user training, tool updates and upgrades and so on. Only when all the members of the team are convinced that a specific tool is best suited for the organization, the purchasing decision must be taken.

One of the main reasons ERP fails is due to the resistance of the user. This is often the result of ignorance and fear-ignorance about the tool and fear of additional work or unemployment. These factors can be corrected by giving proper training. Training should be given at different levels on different aspects of the ERP Implementation. The top management should address the employees’ fear of loosing their jobs as the tool automates many tasks.

The Work culture of the organization is very important for the success of ERP. If the organization has a workforce that is willing to learn new things and change to new technologies then there will be no problems for ERP implementation. But if the employees resist change and see the introduction of formal methods as a means to assign accountability, they will perceive the new technology as something negative. So, the basic midst of the workforce needs to be changed. This is important not only for the success of ERP but also for the success of any process improvement initiative. In changing the employee mindset the two critical factors required are top management support and proper training.

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