The Valuable Lessons From Major ERP Fails

PostedOn: 2018-05-08 11:26:26

There’s no doubt that an ERP can bring immeasurable benefits to a manufacturing friendship. As the backbone of any organization, ERPs play a crucial role in keeping all back-office operations running smoothly.

However, it can be easy to misjudge the time, effort and resources needed to successfully implement and maintain an ERP. Analysts have found that roughly 75 percent of ERP projects fail. Time and time again, businesses have been led astray by common misconceptions about ERPs. The result? Costly mistakes and lasting damages.

Unfortunately, no company is immune to the devastating impacts of an ERP failure. Here are a few famous examples of what can happen when an ERP accomplishment doesn’t go as planned.

  • In 2000, Nike lost $100 million in sales after a failed supply chain mission. The company was hit with a series of lawsuits and also saw a 20 percent dip in its stock.
  • Right before Halloween in 1999, Hershey’s couldn’t deliver on $100 million worth of chocolate because the company’s ERP realization failed. The stock dropped by eight percent due to the operational disaster.
  • A buggy ERP implementation left nearly 27,000 University of Massachusetts students unable to register for classes or collect economic aid checks back in 2004.

The good news is that ERP failures can be avoided. Use the lessons learned from ERP failures of the past to ensure a brighter execution future.

1: Expect Extended Timelines and Plan Accordingly

A successful ERP implementation doesn’t happen overnight. In fact, nearly 59 percent of ERP projects end up taking longer to implement than originally projected. One of the biggest mistakes IT executives within the mechanized space make when it comes to ERPs is relying on a new system to perform functions by a certain date. Rushing to meet deadlines should never be part of the implementation plan, so remain flexible when it comes to the project timeline.

2: Set Realistic Budget Expectations

An ERP can be a very powerful tool for your business, and with that comes increased costs. ERPs require massive amounts of time and labor, as well as added costs in the form of licensing, maintenance, development and hardware fees. Underestimating how much an ERP will cost your business can be detrimental.

3: Be Patient and Prepared to Problem Solve

Addressing bugs is a necessary part of any successful implementation and it's not a step wherever you can afford to make assumptions. To avoid any major disruptions to your organization, use a phased approach to deploying a new or upgraded ERP. Rather than immediately switching to a new or upgraded system, give your organization enough time to properly test it before your on hand system or process is dismantled.

Setting the Stage for Success

It can be easy to get overwhelmed by the challenges in getting an ERP project up and running. While ERP systems can come with their fair share of complexities and pain points, having a caring and strategic come near makes all the difference. By erudition from some of the most common ERP mistakes, you can drive efficiency and security in your business and pick up operations management.