Enterprise resource planning (ERP) systems may suffer from an uninteresting name, but don't be fooled: they represent the backbone of most companies, a frame that supports daily interactions. Broadly speaking, ERP is software that threads different business processes—from accounting, to supply chain management, to reporting, to whatever else—together into one single and integrated system, allowing employees to access the same data for their different needs.

Essentially, moving from isolated business applications to an integrated ERP system is like upgrading your car: the new model runs all the internal components in a cleaner and more efficient way, allowing you to motor ahead at brand new speeds as a result. It increases visibility down the road, so to speak. ERP systems make it easier to comply with new regulations like the GDPR or SOx while also opening up new possibilities in terms of running analytics, meaning that more information is on hand (and faster) for making strategic decisions.

My team and I advise on ERP systems, and therefore we understand their huge potential—but we have also seen the many mistakes that companies can make when getting one. Read on for the four most common mishaps of ERP system implementation that we have seen recently.

1. Being careless with your fuel

An ERP system has the power to redefine how business is done. But such power, naturally, requires execution on the part of the personnel—and that means change in the status quo. We have found that companies are often so jazzed up about the new technological deftness of their ERP system that they overlook change management.

The end-users of an ERP system are employees with their own habits, expectations, and sometimes fears. Changing one component of their work environment could jeopardise a balance that may already be delicate. Indeed, ERP systems necessitate brand-new functions from some staff members, and new ways of performing existing functions from others. And it's not enough for users to simply use a new system: they must understand it, champion it, explore its outer boundaries, and take possession of it. This will take training and communication campaigns to ensure that people realise how and why the work systems embedded in the software are better—better for everyone, themselves included.

Employees who don't understand a new system tend, ultimately, to reject it. A related pitfall is that the company bends over backwards to customise the system to its personnel's wishes, and in so doing fragments the power that the ERP system was originally designed to bring. The moral of the story: don't skimp on change management.

2. Forgetting your roadmap

Migrating data from the legacy system to the ERP software will be a prickly and absorbing chore. Companies are bursting at the seams with data, these days, in various forms and formats. It must be migrated, and it must end up organised, structured, complete, and error-free. Not an easy task.

Most organisations realise the enormity of this job, but few of them plan for its complexity. Moving the data should be high on the priority list, as problems that occur during the process end up being costly and risky. Information that is unusable, badly converted, or lost results in exposure to major problems.

The answer is to define your data-migration strategy early on, making sure to involve everyone concerned. Then, migrate what is really necessary to execute your daily business after doing the appropriate level of testing.

3. Putting old parts in a new car

Another trap that companies fall into is using their current, tried-and-true business processes with the ERP system. In the new context, these business processes can be inefficient, ineffective, obsolete. The solution is to plan ahead on this, which starts with mapping the current processes, breaking down exactly how they are structured and performed. With this information, you can determine how to harmonise, streamline, and improve them, and which ERP system best suits this improvement.

Such an exercise can be done in a few ways: business process modelling, process analysis, or data mining to name a few. External views can be relevant in this context, perhaps bringing a fresher, and thus more objective, set of eyes. It can be difficult for management and staff to admit or even notice their own weaknesses—therefore, a methodical mapping and reassessment of processes is often an easy one to skip. We would recommend against doing so.

4. Not doing any maintenance

Once go-live turns into went-live, and the new ERP software is humming along, some firms pre-emptively leave it behind a closed door. Although it's just the start of the journey, there are subsequent tasks to do: maintenance, enhancement, simplification, and (very importantly) continuous improvement. Think about putting measures in place during the planning phase to ensure the correct follow-ups, with your business goals in mind. User feedback and post-implementation reviews, for example.

Finally, keep an eye on competitors, technological developments, plucky young startups—obsoleteness is coming for us all, eventually, it's just a matter of catching it in time.

Takeaway

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.