Enterprise Resource Planning (ERP) software is a tough nut to crack.
ERP has the largest implementation failure rate of any other software in manufacturing. It’s a critical piece of the manufacturing process, but so many fail to implement a successful solution. As a software distributor, we’ve noticed the demand and the need. At first, we thought it was just another offering we could provide with the same level of success we’ve had with other solutions. Boy, were we wrong. And boy have we learned a lot in achieving successful ERP implementations in our industry.
The first thing that really surprised me is that some of the ERP vendors seem to be unfazed by the failure rate in ERP implementation. They chalk it up to a normal thing for that type of software. It’s as though it’s not a failed implementation, it’s a work in progress or an unfinished implementation. Otherwise, it might be the customer’s fault for a variety of reasons. Human resource issues, too busy, lack of funds, etc.
But all these exterior factors exist in the implementation of other types of software solutions, so why are they to blame for the failures? I’m too stubborn to accept that ERP software is what it is and that there is no way to make it work better for our customers.
Studies do show that it’s a common thing for ERP software implementations to fail. Some say 60% of companies claim to receive 50% or less benefit than what they were expecting after it’s all said and done. I consider that a failure and it is unacceptable. Some ERP vendors even admit that the real moneymaker in ERP software is not the price of the software, but the professional services afterwards.
The software business can be tricky since software vendors are selling intangibles.
There’s so much more that goes into the deliverable than anyone can ever see, touch or feel. It’s a lot easier to be lured into beliefs that will never materialize.
Well, what I have learned about ERP implementations, I’ve learned the hard way. In order to sleep soundly at night, I couldn’t accept the industry odds for ERP implementations. I’ve since learned a few things about implementing ERP software.
The first is the people behind it. Who is developing, implementing and supporting it is absolutely crucial. If you don’t have the right team behind it, no matter what product you pick, what resources you have or what priority you set, you’re destined for the industry standard failure rate at best. I’ve seen this time and time again.
I’ve also learned that what manufacturers want, how they want it and when they want it is often too optimistic.
Implementing ERP software is the right thing to do, but feature lists are a dangerous illusion that catches many of us. It can cost a tremendous amount of money to learn that what we want and what can be done are two different things. In theory, a student driver can sit in the seat of a racecar and operate the brake, gas and steering. But what would really happen on that drive? Sometimes what is sold is a theoretical racecar and what happens is that the buyer can’t even use it for their weekly grocery run.
So many factors come into play when implementing ERP software. Your staff has to buy into it. Too many times, staff feel like the company is implementing something that will get them fired or will be used against them in some fashion. Hence they do everything to make it fail. What we want to implement and what we can implement in a company are two different things. I’ve learned that there can also be stages in the implementation that evolve as staff gets comfortable with the new solution.
There are a million things to cover, but at the end of the day the best thing you can look for are results. Most vendors are happy to tell you about the number of installations they have completed. But when it comes to giving you some references, those numbers will dwindle and they will have a hard time coming up with customers for you to call. Be leery. The only thing that matters is successful implementation, not the feature list. The ultimate question is whether or not you can make it work in your shop?
If the answer to that is no, then the features don’t matter.