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Implementing ERP - Stages of ERP Implementation and Causes of Failure

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ERP implementation is done in a number of stages and the success of implementation depends on the company which does the process. The selection of software vendor should be based on the way a company is working, its business and the requirements. The company should aim to achieve a high performance and get valuable ROI from the new system and the automated methodologies should help in maximizing the business benefits of the software.

Major Causes for Failure of ERP

1. Defective operating strategy which was not related to the business process design.
2. The time taken for the process was more than assumed by the company.
3. Poor preparation before starting the process.
4. Cost was more than expected and the client did not have adequate resources.

ERP implementation requires careful strategies at each stage. The main stages in the process are

1. Pre evaluation stage: In the pre evaluation stage the need for ERP is analyzed. The project plan is designed in which the assessment of vendors, availability of resources and time is estimated.

2. Project plan: The plan of the project is designed and each stage of implementation is analyzed.

3. GAP analysis: The difference between the final plan and the loopholes is studied and a solution is found to prevent delays in processes.



4. BPR: The buyer has to undergo a process of business process reengineering and define the workflow, which can be automated by the new system. The business requirements of the company are analyzed and risk management is done to prevent failures at any stage.

5. Training: The users who will be working on the system are given training. The team involved in process is also trained so that the process finishes smoothly.

6. Testing: In this phase it is ensured if the system is working properly or not.

7. Post implementation phase: In the post implementation phase the system should be updated and the new versions of the software is loaded.

ERP implementation is not a complex procedure if one gets the right kind of vendor and has a clear idea of what has to be done to benefit from the new software. There are many misconceptions of ERPs such as it provides direct benefits by increasing productivity or it can get a high ROI but ERP is method used to automate system and it is not a productive process. It involves expenses in the initial stage and expecting a quick fix at any stage can get costly. ERP cannot solve the problem of a flawed business and excessive need for customization can delay the complete procedure and even cause a failure.

Expecting the procedure to complete quickly can be unreasonable and in many cases the companies going for the automated system are not satisfied with the outputs because they expect a very high ROI. Some companies go for Saas - Software as a solution to reduce implementation time and resources but the satisfaction level for Saas is not very high.

The companies going for new system should analyze the features of the vendors and the product should be flexible to accommodate the current and future needs of the company. The basic processes should be completed without errors and the advanced systems should enable the company to follow new technologies and get rid of the traditional methods.





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