12 Mar 2021
There is no doubt that ERP software is able to bring immeasurable benefits and now, there is an increasing number of SMEs starting their business digitalization journey. However, it is not that easy for enterprises to have a successful implementation as there is several common mistakes that SMEs might face. Below, we have listed out 4 common ERP implementation mistakes and the actions needed to be taken when they occur.
1. Poor Operation Planning.
Planning is considered as one of the most important factors to a successful ERP implementation as SMEs will have to set aside resources such as time and manpower. Adopting an ERP system will require cooperation from each department from sales, warehouse, finance, HR, and more. Without a proper up-front planning, the project’s timeline might be delayed.
Suggestion:
To ensure that the project goes live within the projected timeframe, companies should plan up-front and ensure that each department has a clear understanding of their responsibilities in order to have the software up and running successfully. This includes: prepare and clean up the data which will be needed for migration, list out the full set of requirements of each department, and so on.
2. Unrealistic Budget Expectation.
Before starting the ERP evaluation process, companies should plan a realistic budget for the year depending on their requirements such as whether they only require a simple Accounting software or a fully integrated software is required. However, according to Panoramas’ study, 74% of ERP projects still experience costs overrun.
Implementing ERP software requires a massive number of resources from time to labor force for a successful implementation. On top of that, there might be additional costs incurred during evaluation process such as software license, customization, annual maintenance, or hardware update.
Suggestion:
It is suggested that to keep the ERP implementation within the estimated usage cost, companies should:
- Firstly, talk to several vendors in the market to enquire about their product and also the net cash impact required. After talking to several companies, SMEs will be able to know the market price and then plan their budget accordingly for the project.
- Secondly, do not overlook any expenses even the smallest ones because a bunch of small costs might turn up to be a big lumpsum.
3. Heavy Customization.
The other challenging failure need to be mentioned when discussing about common ERP implementation mistakes is over customization. Panorama’s study found that approximately 88 percent of companies end up customizing their ERP.
Since every company has a unique set of operations, a one-size-fits-all ERP system might not be able to meet all SMEs’ requirements, which will lead to customization, and SMEs will usually want to have all the customization in order for the software to fit perfectly into their business operations.
Suggestion:
To address this concern, it is of importance to cut off unnecessary customization. The users of your software can have an in-depth discussion with the software vendor to discuss all the requirements and identify the customizations required. Since the software vendor has years of experience, they are usually able to propose a workaround solution. If the workaround solution is accepted by the customer, the net cash impact will definitely decrease too.
4. Reluctant for a change.
Some companies may already have a software which they have been using for over 10 or 20 years and the employees in the company are already very used to the current software. Although the management sees that there is a need for a change and have purchased a new system, the users, who are comfortable with the existing software, might still be reluctant for a change.
Suggestion:
Before live run, there will be several user training sessions. After these sessions, it is important and strongly recommended for users to really have a hands-on experience by themselves in order to familiarize the software so that they can fully utilize the software in their daily operations.
To encourage SMEs on their digitalisation journey, the Singapore grant government has recently introduced a few grants for local companies to tap on. As a pre-approved vendor for Productivity Solution Grant (PSG), Synergix Technologies has successfully helped over a hundred clients apply for the grant with the funding of up to 80% of qualifying cost. Besides that, we can also look at Enterprise Development Grant depending on the modules you purchase in order to minimize the net cash impact.
Should you be interested in implementing ERP software, feel free to contact us for a free consultation!
