ERP enables an organization to improve competitiveness by shortening production cycles and delivering accurate information on time. It is very important for an organization to support system implementation at each phase because failure in system installation can be very expensive for an organization. On an average mid-sized companies can take a year for ERP accomplishment and the cost of ERP can vary from $12 million to $63 billion.
To have successful ERP implementation it is very important to analyze the conditions which can cause ERP failure. The major causes for system failure are -
1. Poor management support or poor leadership - If the top management is not involved in the system, it may cause failure. Many processes, departments and applications require integration for which the top department should be involved.
2. Poor planning - Prior planning is very important for success of a system. Poor planning may cause delays and also result in a failure.
3. Frequent change in demand - Modification in business goals, lack of management support and lack of support from organization's staff can negatively affect the system.
4. Stage wise implementation - There are many stages of implementation and the organizations should be careful to implement each stage carefully to reach next stage.
Some of the common success factors are -
Analysis of requirements - The organization's planning to buy ERP should depend on the needs. The selection of technical platform or software should suit the requirements of the organization. A strategic software selection procedure helps in deciding about the best suitable software for an organization.
Project planning - First the project should be planned to identify goals, business requirements and then a project team should be established to evaluate the details of the project.
Focus on ROI - For successful implementation the organization should be focused to generate ROI, set baselines and define targets. After implementation the organization can track performance.
Implementation supported by top executives - Sometimes, systems don't work because of poor cooperation from executives and staff. The top level executive or the supporting staff is not ready to make changes or work as per the new methods provided by the software. If there is any conflict between the implementing team and the management of the organization, it can result in creating conflicting business needs. Everybody in the organization should support the same goals to have successful ERP implementation.
Architecture - Successful factor of ERP depends on the integration with right kind of software and applications. If the software is not integrated to precise middleware or programming language, the chance of failure rises.
Data Integration - The ERP should be integrated well to existing data and legacy information. Data accuracy is the major need of a system as it is necessary for the organization to function well. The software should be selected in a way to enable the management to make decision and take inspiration from the software. ERP can influence people, policies and thousands of decisions can be made by the software.
Provide training and change management - Post-implementation proper training should be given to allow the users to adapt to new system.
