Why Do ERP Projects Struggle? A Roadmap for a Phased Rollout

ERP (enterprise resource planning) brings a business's processes such as purchasing, inventory, production, sales and finance together in a single system. Because its impact is large, expectations are high, too. Yet ERP projects are among those that struggle the most of all software projects, and the reasons are most often not technical.

Five factors that make projects struggle

1. Tackling the scope all at once

Trying to move all processes to the new system at the same time means that a delay in one part brings the whole project to a halt. As the scope grows, so does the uncertainty.

2. Processes not being written down

In many businesses, processes live in people's heads. Exceptions, approval rules and habits of the “this is how we always do it” kind only come to light while the system is being set up.

3. Data quality

When duplicate customer records, inconsistent product codes and missing information are migrated to the new system, the problem is migrated along with them. Data cleansing usually takes longer than anticipated.

4. Resistance to change

The new system changes the way of working that people have been used to for years. When users are not involved in the process, they keep using their old spreadsheets alongside the new system.

5. Unclear ownership

When there is no internal owner to make decisions and set priorities, questions go unanswered and the project waits.

Why is a phased rollout safer?

In a phased rollout, the system goes live module by module. Each phase is completed and used in its own right, and the next one starts with what was learned from it. Problems surface while they are still small, the team gets used to the system gradually and the return on the investment starts to be seen with the very first module.

A seven-step roadmap

1. Map the processes. Write down each process's steps, owners and exceptions. The aim is to see the current state as it is.
2. Simplify. Remove unnecessary approvals and repeated steps before carrying them over to the software. Automating a bad process only makes it faster.
3. Choose the first module. Start with the area that has the most problems or that feeds the other processes; in most businesses, this is inventory and order management.
4. Clean the data. Deduplicate the master data (customers, products, suppliers), set the coding rules and validate the data before migrating it.
5. Run in parallel. Use the old and new systems together for a short time and compare the results. The longer this period runs, the more the double workload grows; limit its duration from the start.
6. Train and support. Deliver training by role; set up a support channel where questions will be answered quickly in the first weeks.
7. Measure and move on to the next module. Evaluate the result with indicators such as order processing time, inventory accuracy or month-end closing time.

Off-the-shelf ERP or custom ERP?

In areas defined by legislation, such as accounting and payroll, off-the-shelf packages are usually the right choice. In the operational processes that set the business apart from its competitors, however, making the package fit the process can lead to high customization costs. A common arrangement that works is to keep the financial side in an off-the-shelf program, manage operations with custom-developed modules and connect the two through integration.

Habits that increase success

• Assigning the project an owner from the business unit who has authority,
• Setting a measurable goal for each module,
• Listing and prioritizing exceptions instead of trying to solve them in the first version,
• Involving key users in the process from the design stage onward.

ERP is not a software installation but a change in the way the business works; and change lasts when it is managed step by step.

To tackle your processes module by module, you can take a look at our CRM and ERP software development service.