ERP Implementation Failure? Blame It On Untimely Planning

July 1, 2014 by Prathamesh Prabhu Leave a comment

There was a time when companies believed they were the kings in their own industry. Fewer brands, increase in demand and localization made companies earn great profits within a short span. As time passed by, the number of companies grew. Not just national level brands but also international companies started invading the industries which were once reigned by the local brands.

This sudden competition forced the existing brands to innovate to reinforce competitive differentiators. New strategies were introduced and the companies started understanding the impact of their business through constant research and experimentation.

Today, companies are not reluctant to spend money to maintain the resources they have. They believe any expenditure spent towards maintenance is an investment that earns them profits in future. To enhance the functioning of the organization, companies embrace Enterprise Resource Planning – an initiative that allows enterprises to make effective business decisions in a timely manner.

The main objective of ERP is to ensure that businesses get a clear enterprise wide view of their structure and functionalities, while unlocking an excellent ROI. Even when companies are equipped with the most advanced systems, it sometimes gets difficult for the higher management to take profitable decisions or draw insights on the performance of their organization, if the data available to them is corrupted.

CDO’s rightly worry that data corruption is one of the main issues that is responsible for the stagnant growth of a company. When organizations migrate or merge with other entities, they face challenges in maintaining the different legacy data. As the historical data comprises of critical information such as details of past business transactions, assets, inventory, customers, dealers and other vital business insights, their existence cannot be ignored. To avoid confusion and enhance the quality of the existing data, an effective ERP data migration strategy should be implemented. A well planned strategy will ensure that only the right information is retrieved and stored in the new system.

As ERP implementation projects rely heavily on the functional aspects of an organization, business consultants often come together to develop a new framework and ensure smooth transition of the existing data. While optimum data migration and data management can be attained only with effective planning, the pressure from the senior business management often makes the consultants create a framework in haste. This leads to the migration of poor quality data in the new ERP system along with important assets that are beneficial for the company. This in turn leads to ERP implementation failure from the very first day, owing to failure of the main objective- enterprise wide visibility.

It is important for companies to understand that though ERP implementation is essential for effective business operations, it is the quality of data used that matters the most. Hence, companies should invest adequate time and resources to extract, cleanse, modify and organize their existing data, before implementing an ERP strategy. Effective planning and timely execution is all it takes to be a step ahead in the business world. The day companies understand the true importance of real planning, successful implementation of ERP strategies will be accomplished.

Recommended Reads:

White Paper: Handling Key Master Data Objects During An ERP Data Migration

White Paper: The Million Dollar Question: Master Data Management Before or After ERP

Blog: Monetization of MDM initiatives in an ERP Consolidation or ERP Upgrade landscape