Why ERP Fails

Why does ERP fail?  Nearly every business depends on ERP to get business done on a day-to-day basis, and yet polls suggest that more than 50% of all ERP projects fail to meet the budget, timeline, or original goals of the project.  With such an epidemic failure rate, why do so many businesses sink billions of dollars into a losing proposition?

The decision to implement ERP typically comes from the top down.  “We can’t stay with the system we have because of [insert technical/reporting dilemma], so we have no choice but to implement ERP.”  Unfortunately, this mentality doesn’t take long to pass on to the users and implementing ERP turns into a chore as opposed to an opportunity.

Motivations play a strong role in ERP implementations because in order for them to succeed, the users need to own the solution.  While it’s important that the project has executive sponsorship from management, success in the project will depend on the business processes developed by and for the users.  Good business processes will result in user acceptance and pride in a system that will lead to clean, and accurate data.  This is a mandatory prerequisite to the kind of information that can provide true insight for any business.

Unfortunately, many businesses are never properly motivated to implement ERP and end in failure.  So instead of focusing on ways of improving processes and collecting good data, they are focused on how to replicate their existing legacy processes or hinder the progress of the project to avoid change.

It’s always difficult to change, but if you’ve been spending 40 hours a week working in the same environment for several years, it can be especially difficult.  Many project leaders take the approach of forcing the new system on the users and reminding them that they have no alternative.  But the challenge of ERP is not to force users towards change, its about offering the tools to make their jobs easier, more efficient, and more effective.

Motivations are key to your success in ERP.  Offer the carrot by looking for the potential benefits that ERP can offer your business.  Get your users to see the benefits of changing their daily routine by offering them better reports, newer technology and more automation.  Successful implementations reduce wasted time, increase visibility, and offer users an opportunity to work at a higher level.  As an added benefit, motivating your users to own the solution should save you a few hours on consulting.

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