Four Common Trip-Ups When Implementing An ERP System

Enterprise resource planning (ERP) systems may suffer from an uninteresting name, but don't be fooled: they represent the backbone of most companies, a frame that supports daily interactions. Broadly speaking, ERP is software that threads different business processes—from accounting, to supply chain management, to reporting, to whatever else—together into one single and integrated system, allowing employees to access the same data for their different needs.

Essentially, moving from isolated business applications to an integrated ERP system is like upgrading your car: the new model runs all the internal components in a cleaner and more efficient way, allowing you to motor ahead at brand new speeds as a result. It increases visibility down the road, so to speak. ERP systems make it easier to comply with new regulations like the GDPR or SOx while also opening up new possibilities in terms of running analytics, meaning that more information is on hand (and faster) for making strategic decisions.

My team and I advise on ERP systems, and therefore we understand their huge potential—but we have also seen the many mistakes that companies can make when getting one. Read on for the four most common mishaps of ERP system implementation that we have seen recently.

1. Being careless with your fuel

   An ERP system has the power to redefine how business is done. But such power, naturally, requires execution on the part of the personnel—and that means change in the status quo. We have found that companies are often so jazzed up about the new technological deftness of their ERP system that they overlook change management.

   The end-users of an ERP system are employees with their own habits, expectations, and sometimes fears. Changing one component of their work environment could jeopardise a balance that may already be delicate. Indeed, ERP systems necessitate brand-new functions from some staff members, and new ways of performing existing functions from others. And it's not enough for users to simply use a new system: they must understand it, champion it, explore its outer boundaries, and take possession of it. This will take training and communication campaigns to ensure that people realise how and why the work systems embedded in the software are better—better for everyone, themselves included.

   Employees who don't understand a new system tend, ultimately, to reject it. A related pitfall is that the company bends over backwards to customise the system to its...