Issues & Challenges in the Implementation of ERP

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ERP implementation requires planning and flexibility
ERP implementation requires planning and flexibility (Image: Jupiterimages/BananaStock/Getty Images)

Enterprise Resource Planning (ERP) is a software system that automates and integrates business processes in a company. ERP can apply to virtually all operations and financial processes. Issues and challenges in one business process area can significantly affect the others in unforeseen ways. This is due to the many changes required in the way people work together when implementing ERP. This degree of change typically leads to reducing the scope of initial implementation phases and can result in re-implementations of certain areas.

Project Management and Issue Resolution

Initial implementation plans and schedules must be flexible, because everyone is learning how to apply the software to the business. This flexibility requires controls, project management and an executive steering committee to enable quick decisions in problem areas. An issues-resolution list process requires not only quick response but analysis of the impact of each resolution on other parts of the business. After implementation, on-going audits of system use also require the issue-resolution process. Unresolved problems quickly use up resources, causing implementations to stall and fail.

Business Processes and Going Live

ERP implementations can last one to two years. Pressure to “go live” and use the software in a reasonable time frame can lead to cost and schedule trade-offs. These trade-offs can cause more implementation phases, more complexity and re-implementation. For example, a company might decide to forgo a new fixed-asset system by continuing to use Excel spreadsheets, thereby enabling use of financial software sooner. The key is to realize that plans will change and flexibility is important.

Availability of Technology

Availability of technology, whether it is software, databases, networks, hosting services or hardware, is important to remaining on schedule. For example, software installation is required before training or testing. Missing the install, training or testing schedules can have a domino effect because business processes rely on each other to be implemented and performed.

Adding, Enriching and Converting Data

Adding new data, enriching that data with more information, and converting data from the previous system requires a tolerance for surprises. Often, previous systems are poorly maintained and the data is full of errors. Because data in one area can result in creating data automatically in another area, these errors can be compounded. For example, merely forgetting to input a part type (e.g., purchased, manufactured, finished good) can cause problems in the material requirements planning areas of the software.

Timing of Training

Software training of the project team before the pilot or testing phases, and of the actual users before they use the software, must be timely to support implementation schedules. Poor or badly timed training leads to retraining and significant changes in implementation schedules.

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