ERP IMPLEMENTATION STORY SUMMARIZE A SUCSSEFFUL OR FAILER STORY OF ERP IMPLEMENTATION? ONE PAGE ONLY IN POINT. 1 spor ao e mars 71 186 Part Three Information Technology in the A/S 7. A bad match behoren ERP sofware and organizational processes. Every organization has its own ways of doing business. And, while ERP systems can be customized to a degree based on specific organizational contexts, such modifications are time consuming and expensive Managers would be well advised to consult with colleagues in the field about which ERP software has worked well, and which has worked poorly, in a specific industry. 8. Inaccurate data in the system. As the old wing goes: "garbage in, garbage out" The reports and information generated by an FP system are only as valid and useful as the da that undergird them. Faulty or inaccurate data in the ERP system can be even worse than the same condition in less-integrated systems, since they will be used throughout the organ: ization for decision making. Once inaccurate data have been discovered in a systern, every other prior and future output are called into question until the situation has been resolved 9. ERP implementation viewed as an IT project. As discussed above, implementing an ERP system goes far beyond the information technology requirements. Fundamen- tally, an ERP project needs to be viewed as holistic, touching not only information technology, but also business processes and organizational behavior issues. 10. Significant technical difficulties. Of course, even though an ERP project is not solely concerned with IT issues, some technical problems may arise. Bugs in the software problems interfacing with existing information systems, and hardware difficulties are just three identified by Umble and Umble. Similarly, Umble and Umble (2002) discussed six necessary conditions for a success- ful ERP implementation: 1. Obtain organizational commitment. This condition speaks most clearly to poor leader- ship from management and trying to maintain the status quo. The ERP project team needs to get a clear, strong commitment to the project throughout the organization, but especially from the top management. Without a psychological and financial commit- ment to see the project through to its completion, the project may "lose steam" when encountering difficult problems. 2. Communicate strategic goals clearly. This idea also relates to two of the common causes of ERP implementation failure: unrealistic expectations, and inadequate educa- tion and training. Employees in all functions at all levels of the organization need to understand the goals of the ERP project-typically, providing better information more quickly for decision making. 3. View ERP as an enterprise-wide venture. An ERP system will eventually touch every aspect of operations; therefore, it must be viewed as a company-wide project. If the project is viewed as just another information technology initiative," managers will lose the opportunity to examine business processes thoughtfully and critically-possibly leading to automating redundant or non value-added processes. 4. Select a compatible ERP system. Here, we're talking about items 7 and 10 from the list of common causes of failure: a bad match between ERP software and organizational processes, and significant technical difficulties. The bottom line: Don't believe every- thing the software vendor or implementation consultants tell you! Do your own research; ask for other companies that have had successful and unsuccessful implementations. 5. Resolve multisite issues. ERP implementations are inherently complicated. But they become more complicated when an organization is geographically dispersed. The project man- agement plan (see item 4 in the preceding list) must deal specifically with multisite issues. 6. Ensure data accuracy. The final key to success in ERP implementation is directly related to item 8 on the previous page. The project team needs to do significant employee education about the importance of accurate data entry; test runs with fictitious data before the system "goes live" also can help achieve this goal. ceivable Ae preces of information an ERP system should capture in each module shown above. alysis and 10.3 attention the net Many organizations have experienced significant difficulty in implementing ERP systems, consider the example below database (A major soft drink bottler), which implemented a major ERP system, completed the implementation, but not without losing significant personnel and system functionality. After committing millions of dollars to purchase an ERP software, the soft drink maker tried cutting comers during implementation. Relying too heavily on its own people instead of consultants, the bottler expected too much from its already taxed employees. Trying to minimize setup costs and reduce expenses, the company overlooked many of the planning team's recommendations regarding the project. This ERP implementation created high tumover and communication problems, which led to the termination of key people and animosity among employees. All of these factors, in turn, led to a system that was grossly underused, and in the beginning, a hindrance to the overall business. (Barker and Frolick, 2003) wo well p.com) syluac), ogram mod- eports, ampo- ables Umble and Umble (2002) identified 10 major causes of ERP implementation failures: 1. Poor leadership from top management. Selecting and installing an ERP system is an enormous undertaking in terms of time, money, and energy. Clear, strong leadership and support from top management are essential for a successful implementationwithout them, employees are likely to view the ERP system as just another 'initiative du jour." 2. Automating existing redundant or non-value-added processes in the new system. An ERP implementation project is a terrific time to reconsider the company's business processes. In other words, do policies, procedures, document flows, and internal con- trols make sense from a business point of view? Do the processes add value to organi- zational stakeholders? In most organizations, at least a few policies and processes will need to be changed to make the most of the ERP system. Otherwise, managers will be doing the same, ineffective things only faster. P 3. Unrealistic expectations. An ERP system is designed to collect , process, and report data and information for making management decisions more effectively. Systems are not a panacea for problems with organizational culture, poorly designed business processes, or inadequate internal controls. Expecting an ERP system to fix those kinds of problems is a forlorn hope and will seriously jeopardize the project's success. 4. Poor project management. ERP system selection, testing, and implementation are time-intensive, long-term projects. To be successful , managers have to apply solid pro- ject management techniques for selecting the right people, completing tasks in the right order, and staying on schedule. 5. Inadequate education and training. This failure cause is linked to many others in this list . Without good training and education, employees may have unrealistic expecta- tions of what the ERP system can do; they also may see the ERP implementation as solely an information technology project, rather than as an opportunity to analyze business processes and make them better. 6. Trying to maintain the status quo. Since an ERP system is such a major undertaking, implementation will almost always create fear and uncertainty throughout an organi- zation. When people are fearful about their job security and future in the firm, they will likely act in very dysfunctional ways, either intentionally or unintentionally. To avoid this problem, be upfront and honest from the start about the purpose and possi- ble results of implementing the ERP system. 185