Top 5 Reasons Why So Many ERP Implementations Fail

Organizations implement ERP systems to make their processes simpler and faster. However they fail to understand before making this million dollar investment that just bringing in any such software will not transform their Organization overnight.

The management which is responsible for implementing the system does not dedicate ample time in measuring the risk and return of the implementation. This inefficiency in analysing the situation and business needs often leads them to go for the wrong system implementation thus losing million dollars.

There are various reasons which are responsible for opting for the wrong ERP system implementation. There are 5 main reasons why so many ERP implementations fail.

Lack of Proper Supervision

There are Organizations which do not have the expertise required to understand what kind of System will suit the needs of the Organization. The whole task of implementation is left on the shoulders of the third party which often proves to be fatal for the Organization.

Inadequate Knowledge

The market is all dumped with different kind of ERP software. There are some systems which are being sold by the intermediaries who do not have proper knowledge of this software and also lack the expertise to implement it and this is the reason why so many ERP implementations fail.

Lack of Capital

The good and efficient ERP software are costly and the Organization should be prepared to shell out considerable amount of money in order to get a system implemented. Now this becomes the most crucial decision because the management should select the system which suits to the need of the company and also rests well within the budget. Those who are given the responsibility should do deep research in assessing the cost. There are organizations that leave the decision of assessing the cost up to the third parties or vendors that’s why so many ERP implementations fail.

No Proper Training

Just implementing the software will not help the Organization as the system will not work on its own. The software requires those experts to implement it who are given proper training. Those who will use this software in the Organization can initially take help from the implementation support team. However by the time the support team withdraws their support these users should master the system otherwise they will find it difficult to solve the real time issues if occur any and the whole system will collapse.

Difficult to Change

In every ERP system there is a basic structure which cannot be changed or modified. The companies cannot bring any change even if they want to in this functionality. The organizations face real trouble at times when they cannot change these functions thus risking the efficiency and employee confidence and the reason why so many ERP implementations fail.

Thus the ERP Systems should be selected very carefully and there should be proper research and cost analysis be done before implementing the system. If the proper research and the actual needs of business are not known then the ERP implementation will fail.

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Keywords: Causes of failure of erp implementation, Why erp implementations fail, Why erp implementation fails

By: Payton Polkinghorne

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