In this 7-part series we will present ideas and solutions to help build a business case for a new ERP in just 7 steps. In this fourth step we will take a look at some of the Implementation Risk challenges to getting support for your ERP project.
Step 4: Implementation Risk Assessment
Here in Step 4 of our ‘Making a Business Case for a New ERP’ series we are going to take a look Implementation Risk Assessment. What are some of the pratfalls to avoid when selecting the ERP solution that is right for you company, process and employees?
When looking at the possible risks during an implementation, some of the potential risks include: Operational, IT and Financial. By understanding what the ERP does, and how it will affect your organization as it currently stands will allow you to mitigate many of the risks that pop up during implementation.
If you choose a complicated ERP that is hard to use you risk a low adoption rate, causing considerable operational risks. When employees are asked to learn something new, if it is not intuitive or easy to use there can be frustration and resistance to change. By picking the best ERP solution for your company, processes and current staff you can cut down on operational risks and gain the ability to more efficiently manufacture your products.
When it comes to your IT department and risk, make sure your ERP solution of choice has a long shelf life (a typical ERP solution should last around 10 years, before you need to upgrade your system) and is highly customizable to your manufacturing and process requirements. Another huge potential IT risk for ERP implementation is resource intensive requirements. If the implementation requires your limited IT department to focus too much on the implementation other aspects of your company’s IT could suffer. Just like the operational risks you need to insure the solution you chose is flexible and customizable system, allowing your IT team to be able to manage the product properly.
Operations and IT are not the only group at risk for an ERP implementation. ERP systems are expensive, ERP implementations are more so; especially if the ERP requires additional software packages and user licenses. While many small and medium sized manufacturers look for Tier 1 functionality and features, they need to find a non-Tier 1 vendor to provide everything they need in a solution, at a price they can afford. By finding a price point within your budget (and budgeting for implementation overages) you will be able to cut down on potential financial risks.
Above are just some of the risks that can be attributed to implementing a new ERP. To avoid you shiny new ERP becoming a money pit, the ability to know and understand the solution being presented, along with a realistic assessment of your company will provide you insights beyond the balance sheet. Plan, research and budget properly for your ERP implementation, but above all else, pick the solution that is the right fit for you company operationally, technologically and financially. If you can avoid these risks during the implementation, you will be able to get higher return on your investment and the most out of your ERP solution.
Make sure to check back next week for Step 5: Recommend the Preferred Solution
Step 5: The Implementation Approach
Step 6: Return on Investment Measurements
Step 7: Recommend the Preferred Solution