Solution doesn’t fit business needs 80.56%
Not including users in the decision-making process 69.44%
Lacking ease of use and intuitive user interface 47.22%
No mid- to long-term scalability 38.89%
Not speaking with client references 22.22%
Not reading the fine print of the purchase and services agreement 27.78%
A considerable 80% of experts identified ensuring the fit of the solution to business needs as a common factor companies overlook when choosing one solution over another. At first this may seem surprising: functional fit ought to be the basis of any shortlist of contenders. But as respondents made clear in their comments—and this aligns with our experience at TEC—two factors often interfere with proper functional assessments: a preoccupation with pricing, and insufficient requirements gathering before assessing software solutions.
- While every company must keep its spending on target, it’s not helpful to let pricing concerns overshadow thorough exploration and discovery. Even if a company finds that its dream software is out of reach cost-wise, it will have learned about what fits its needs and may be able to find a similar package for less elsewhere. (See our coverage of ERP budgeting.)
- Not going deep enough into requirements gathering before beginning to assess solutions can result in a common outcome: a partial-fit software system. The rush for progress may sacrifice a full understanding of your business processes and miss some of the nitty-gritty functional requirements. Although it may be tedious, it’s essential to thoroughly map your business processes before you finalize your requirements list.
Along similar lines, nearly 70% noted the mistake organizations make of not including users in the final decision on which ERP system is the best fit. Users often know the core business operations better than IT and C-suite staff, so excluding them from requirements-gathering work or software demos, or from otherwise participating in the final decision, is a recipe for trouble.
And 47% of our experts said that companies often don’t pay enough attention to whether the user interface is intuitive and friendly. It can seem like a nice-to-have rather than an essential, but if users don’t like or don’t understand how to use the system, you’ll have real trouble with buy-in.
As Andrew McCarthy, a VP at Workfront, made clear, “ERP isn’t an administrative backbone serving Finance teams. It is a solution serving almost everyone in an organization. Addressing the needs of users is crucial in effective deployment of administrative systems, because no CEO is going to force people to conform to a system that slows down business results.”
ERP Implementation Success: It’s Not About IT
We asked our respondents to identify the three most frequent problems that occur during the implementation phase of an ERP project.
Poor choice of implementation partner 45.95%
Lack of internal skills and resources 40.54%
Lack of organizational and executive support 64.86%
Poor data integration 21.62%
Poor project and budget planning 24.32%
Managing user expectations and change management throughout 64.86%
Lack of control over customizations 32.43%
People often consider the implementation stage of a software project to be the sole property and problem of IT. But most experts agree that implementation headaches or failures are most often the result of issues that fall well outside the IT department or technical infrastructure of a company.
In fact, lack of organizational/executive support and failing to manage user expectations each garnered a vote from 65% of our experts, while inadequate change management was picked by 45%. Poor data integration—the variable on our list most closely associated to core IT territory—was lowest on the list, picked by 22% of our respondents. Data migration and integration are essential components, but they’re less often the implementation killers.
ERP success can only be achieved with organization-wide support and adoption. You can’t buy that in an ERP package from a software vendor—you need to manage that internally.
Nearly 50% of respondents also indicated poor choice of implementation partner as a top reason ERP implementations fall apart. An implementer should be seen as an extension of your internal project team—a technology partner that can help administer positive change throughout your organization. You need to consider the implementer’s knowledge of, and alignment with, your company’s industry, needs, and even business culture before you commit.
For more advice on ERP implementation, see TEC’s popular post on overcoming the most common challenges.
Change Management and User Involvement: Crucial at Every Stage
We put together a list of common missteps across the continuum of ERP software project stages and asked the experts to choose the three they’ve seen most often.
Poor requirements gathering 32.43%
Poor project and budget planning 43.24%
Inadequate training and user adoption efforts 54.05%
Inadequate maintenance and support plans (post-implementation) 5.41%
Underestimating change management needs 67.57%
Poor solution fit to business needs 43.24%
Unclear internal role and responsibility assignments 29.73%
Being swayed by a flashy vendor demo or presentation 18.92%
Our respondents indicated underestimating change management needs as the top general ERP project mistake: almost 70% of experts chose this as one of their top three. Many companies still consider an ERP selection and implementation project to be the province of the IT department, underestimating the impact it has on the whole organization. Companies need to integrate an ERP solution not only to their back-end systems, but into their employees’ environment and day-to-day processes.
As Judith Rothrock, President of JRocket Marketing, put it, “Every single customer testimonial I’ve written says that business or industry change is their biggest fear/bogey [when selecting or implementing an ERP]. Also, there’s a lot of buyer’s remorse around going with a large vendor solution that looked good in demos but fell down in actual usage.”
Inadequate training and user adoption efforts was the second most common misstep (55%). This issue goes hand-in-hand with the woes a company experiences when it doesn’t employ sufficient change management strategies. Users should be included at all stages of the project, both to make sure their ground-level requirements are taken into account and to ensure they understand the value the new system will bring.
As many experts said in one way or another, an ERP system can only support efficiency and positive change when thorough planning and user inclusion have been a part of every stage.