Why Distributors and Manufacturers are surprised
by are the ramifications of a failed ERP implementation

Distributors and Manufacturers know the benefits of an ERP solution. But what many are surprised by are the ramifications of a failed ERP implementation. Why is it that so many ERP implementations go sideways, and how do successful Distributors and Manufacturers minimize the risks of a failed project? If more companies were aware of the statistics regarding ERP implementations, they may be inclined to avoid the common mistakes.

Although a quality ERP solution can reduce operational and administration costs by over 20%, some surveys suggest that around 50% of all ERP projects fail in some manner with approximately 65% of ERP projects exceeding costs, and approximately 75% of ERP project timelines not met.

There are some pitfalls Distributors and Manufacturers can look for when embarking on an ERP project. Failure to define goals, set expectations, embrace change, get commitment from key stakeholders, assign competent project managers, and budgeting for customizations and complimentary software are a few.

Creating a detailed map to outline your goals will mitigate risk and help the implementation team stay on the same page. Setting milestones will be key since your ERP implementation is going to take anywhere from at least six months to a year, with major milestones typically including discovery, planning, design, development, conversion, customization, testing, training, and deployment (go live).

You will need a project manager to familiarize themselves with day-to-day operations, have knowledge of ERP systems, attention to detail, and ability to guide others. Key business personnel from each of the departments affected should be represented on the implementation team. Be prepared to commit to the time required or think twice about moving forward until you are prepared for the time commitment.

Distributors and Manufacturers

Testing is an important phase of any ERP implementation process and should not be minimized. Also, data from your old systems needs to be transferred to the new ERP system. This is not going to happen by itself, so the time and cost needs to be factored into the plan / budget. This could also an opportunity for Distributors or Manufacturers to clean up old or bad data.

There is common misconception amongst Distributors and Manufacturers when it comes to the cost of training their employees for using a new ERP software system. Your staff doesn’t only have to understand and get skilled in a new set of processes but also be comfortable using a new software interface. So, bear in mind, on-going training and improvement procedures need to be accounted for in your implementation budget.

Distributors and Manufacturers have their own unique needs that are expected to be met by the software. It is imperative that during the planning phase, these customization requirements are identified and included in the plan.

Summary

The fact of the matter is most ERP projects fail because of the ERP implementation process and not because of a poor selection process or the functionality of the ERP software. The issue is that the implementation of a new ERP solution is new territory for many mid-sized Distributors and Manufacturers. Creating a well-planned roadmap will help ensure a successful implementation as well as choosing a qualified Project Manager and be sure to include Testing, Training, Conversion, Customization and Travel.