People must be central part of ERP planning

People must be central part of ERP planning

Adopting a new enterprise resource planning program, such as Dynamics NAV, is something that many organizations have done and will be doing in the near future. In fact, according to the 2013 InformationWeek Enterprise Applications Survey, 77 percent of business technology professionals said it is somewhat likely they'll invest in ERP by summer 2015. Approximately 34 percent said this investment is somewhat or very likely. Blogger Jasmine McTigue wrote on InformationWeek that these are time consuming projects that need to be taken seriously.

"I wish them luck, because in ERP, failure is expensive," she said. "In addition to astronomical up-front licensing, expert services can cost at least three times the price of the license. Poorly planned or executed implementations have the potential to run far more. And that doesn't include capital and operational costs around wasted productivity, staff reallocation or software maintenance, which typically runs 20 percent to 30 percent of the purchase price of licensing."

To truly get the most out of an ERP implementation and make sure failure is not an option, McTigue said there must be a focus on people. The first mistake she sees is making ERP completely an information technology project and not having the rest of the business involved. Simply migrating can be time consuming and pointless, as without the knowledge and training of workers, the program may never even get off the ground. Since ERP likely changes multiple aspects of how an organization will work, there must be a lot of attention paid to detail, such as who will be performing certain tasks in the programs and how they will do it.

People must be involved in the process
Software professional Kevin Herrig said making a major ERP upgrade leads to many potential mistakes that can be made. The first big error he wrote about on TechRepublic was not telling users what the new system will mean to the organization before starting work on adoption and implementation. He went as far as to say that keeping users in the dark is the quickest way to "doom an upgrade project."

"Why? The software will work, the hardware will work, but it doesn't matter unless the users buy in," he wrote. "There is nothing more politically powerful than user perception, and if they decide the system doesn't work, it won't."

Another common ERP mistake is not testing the system with end users, which can be a stumbling block at the start of a program roll-out. Failing to take change management and testing seriously can also be a huge issue, he said, as there will likely be more that changes across the business than simply the software when an ERP system is upgraded. Thoroughly evaluating the company's structure and figuring out which areas will need to be adjusted is a must for organizations making changes such as this.

Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website today.

Posted in: ERP Solutions

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