Deep down we all know this, but ERP systems don’t “fail”. They don’t wear out, they don’t miscalculate and they don’t decide one day that they don’t like you or your company. They do what they are programmed to do and that’s it. And that is the problem.
Eric Kimberling has been writing about “ERP failures” for the past two decades, and across his thousands of ERP blogs and articles, there has yet to be a mention of an ERP system itself actually “failing.”
So, what is really happening when an ERP system isn’t doing what it needs to do? Here are a few ideas:
You selected the wrong ERP system
We still see on a daily basis where companies have simply selected the wrong system. It’s true that ERP systems have increasing flexibility in recent years, but with flexibility comes variations of functionality. Make sure to hire and independent ERP consultant or follow a method for selecting an ERP that extends beyond calling a few vendors and asking for quotes.
In a case where ERP just doesn’t do what you want it to, don’t blame the ERP software. It’s like blaming your dog when he tracks mud into the house. This is where an effective ERP software selection process can help.
Your business has changed since you first implemented your ERP software
This is probably the most common cause of “failure” that we see. As businesses grow or change direction, associated business processes and technology needs also change. If your technology is not upgraded or re-adopted to your changing business, it simply won’t work as you need it to.
Until AI is built to the point that ERP can configure itself to business process change (and we may be heading in that direction at some point), it is your responsibility to keep your technology up to date. Remember, ERP software only does what it is configured and programmed to do.
You are on an old version of your ERP software
Current day cloud systems allow for seamless updates and releases, but if you are on an older legacy system this may not be the case and you probably are not able to access any revisions or updates that have been made. Likewise, if you have just upgraded a legacy system but did not consider previous customizations or unique integrations, this could also be a cause of system errors.
Your ERP software was implemented incorrectly from the start
Incorrect implementation could yield a range of symptoms. The most common scenario is where business requirements are not documented, and the systems integrator is told to simply configure “best practices.” We have plenty of blogs on the misunderstandings of best practices, but generic best practices will only get you so far, and your ERP won’t know how to adopt unless you help it understand the functionality you need it to provide. (Also read the article: Big Systems Integrators Exposed).
People are not using the system correctly
Organizational Change Management (OCM) may seem like an overused term these days – and some may even argue that organizational change management is dead – but companies still overlook the most basic premise of making sure their users understand and use the systems provided for them. If you completed proper training upon your initial implementation, consider the idea of refresher training, updated training for new releases as well as make sure that a training program is in place for new users.
Your ERP software is just old
Again, it’s not broken, but it simply can’t do some of the things that a current model can do. If you’re using legacy software and want to incorporate advanced analytics or IoT, it could be a tough battle.
Hopefully, this messaging is nothing new. ERP is a requirement for nearly every business today and many business owners and executives don’t quite understand all the factors that it takes to implement and effectively use one of these powerful software tools.
If you are finding your current ERP system isn’t doing what it once did or what you would like it to, consider one of these scenarios before complaining that your ERP just “broke.”