Watching Out for ERP Pitfalls

Companies that invest in ERP systems spend exhaustive amounts of time, energy and resources throughout the entire deployment process, from selection through implementation. When it’s time to go live, they naturally experience a certain amount of anxiety. After all, they’re executing sweeping business changes.

Unfortunately, in too many instances such anxiety occurs for other reasons, usually a lack of complete preparedness. This may be due to the implementation team inadvertently discounting the importance of some rollout activities, or perhaps because of management pressure to push the implementation process too hard. The costs resulting from such unpreparedness can be devastating: to the ERP mission, to the acceptance of the new ERP solution itself, and to the bottom line.

In my own experience as a supplier of MRP and ERP programs over the past 20 years, I have identified three common pitfalls that are especially detrimental to successful ERP implementations:

1. Modifying ERP Software Prior to Pilot Testing

Companies looking at ERP systems for the first time, and perhaps even those who are experienced with legacy systems, may be prone to customizing their ERP software right out of the box to suit the way they’ve been doing business. However, since the new ERP programs will essentially help reengineer their businesses, early customization of ERP modules is a major mistake.

Following a proper sequence of events can help prevent premature and even unnecessary changes. After selecting the ERP software, training leaders should be identified by the organization. The vendor should then train these trainers, so that they can set up and test the system. Subsequently, these trainers should implement a Pilot Project that is representative of 80 per cent of the company’s business before making any sweeping changes.

Test the new system in parallel with the old one, running the Pilot Project as if it were the live implementation. If a sales order is taken on the old system, then enter it into the Pilot. If parts are purchased, run the purchases through both systems. In this manner, you can actually track the entire Pilot Project through both systems in parallel. This is much easier than trying to run 100 per cent of the business in parallel (all products, all projects).

Tracking and comparing the results will help you determine where any difficulties may lie. This is the time to evaluate whether modifications may be necessary to the system due to nuances in your specific industry. If modifications are made to the base system, then be sure to thoroughly test them well in advance of the live implementation by incorporating them into your Pilot.

2. Inadequate Training

It is a mistake to cut corners on training. Successful ERP implementations depend on successful training. Training may include: classroom instruction supplied by your ERP vendor; or from Web, interactive and other distance learning courses. Ask referral ERP users what training tools proved most important for them.

Evaluation committees should consider what kinds of training are available from prospective vendors, and what percentage of the total ERP system cost should be budgeted for training. Many vendors recommend at least 10 per cent to 15 per cent. Some recommend an estimate of 120 hours per person. It is likely that your training investment will help drive your rollout plan; that is, the more you spend on training, the faster your rollout may be accomplished.

Training should be synchronized with your overall implementation project. Keep in mind that formal training of all users is not normally deployed at the beginning of the implementation. If you train too early, users may forget how to perform their new tasks by the time the system goes live. Training can take place as late as two weeks before the beginning of the implementation cycle.

Usually the training of the users is done by the training staff, who first learned how to use the ERP system during the Pilot. User training is ideally performed on the customers’ premises, using the organization’s line-of-business data and the new ERP system. Be aware, however, that it is often difficult to get trainees to sit all day through on-site training. They may be inclined to run in and out of the training sessions, answering telephone calls and responding to everyday problems within their departments. This should not be permitted.

3. Insufficient Implementation Support

You need to have adequate implementation support from your software vendor during the week you go live. Don’t try to short-circuit this element just to cut the implementation cost. It is always good to have at least one software representative on site during that first week. After all, some of your people are bound to forget how to use this new ERP tool, even though they’ve been trained on it.

Few organizations can afford to suffer through these three pitfalls of an ERP implementation. Any conscientious ERP vendor will do its best to help ensure that you avoid making mistakes during the implementation. However, you should be aware of the issues and discuss them with prospective ERP vendors early in the selection process.

Sean McAlary is president of ONLINE Software Labs in Corona, Calif., manufacturer of the DMACS ERP system for manufacturing and distribution businesses. ONLINE Software Labs can be reached at [email protected] or

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