8 October, 2019

Why ERP Implementations Fail?


If I get a dime each time a NetSuite ERP Implementations Fail… I know it’s a cliche, but I could afford a nice luxury car! Yes, many of them go south.

Reasons of ERP Implementations Fail

1. Poorly Defined Goals:

Many organizations turn to ERP and expect it to solve all their business problems. Unfortunately, they don’t take enough time to define their goals and how they will measure success. Furthermore, the project timeline may not be realistic. This can put serious stress on the project and cause delays or failure.

Learn more about our NetSuite ERP Implementations Services!

2. Miscommunication:

Frequently, key business process owners may have a hard time communicating their exact needs to the solution provider. Even though they know what they currently have in their legacy system is inadequate, they instinctively try to mirror their processes and setup in the new application.

By contrast, the Solution Providers understand what NetSuite can do, but they either don’t know how to translate the customer’s requirements or cannot manage clients’ expectations.

The key premise here is that NetSuite cannot be like a customer’s legacy system; it will be better, but it will almost always be different. This is not always easy to understand and may cause frustration.

Read more: Benefits of GenAI Integration in Enterprise ERP Systems in 2024

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3. Lack of Management Commitment:

The client’s management must provide ample time for the project team to execute project-related tasks. Some employees may feel like they are doing two jobs for a period, so their managers must help them better coordinate their workload.

It is also crucial that they are actively involved in the implementation. They will frequently be asked to make decisions affecting their business processes and, therefore, the company’s future.

Organizations where the project team (involved in the ERP implementation) does not receive their management team’s full support and attention, are typically unsuccessful.

4. Ineffective Project Teams:

The previous point illustrates some situations where the client’s project team may be ineffective. The team’s composition may be equally important, if not more so. ERP implementations are almost always very complex undertakings that require industry-specific expertise on both sides (the implementer and the client).

The client’s expertise and commitment are crucial. Without the help of designated Subject Matter Experts (SMEs) on the client side, the project will likely fail. Hence, it is very important that the executive team aligns the entire company around the same goal and that the right people manage relevant tasks.

Similarly, a Solution Provider’s industry-specific experience is invaluable. It is not enough to know the software or a platform; it is also important to master how they can be molded to accommodate the client’s needs with minimal enhancements.

Read more: Bypassing Common NetSuite Implementation Challenges: A CTO’s Guide

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5. Customization:

Speaking of enhancements, the worst thing the company can do when implementing a new business software is re-engineering it.

When clients are introduced to a new system, they don’t know it. As mentioned in point 2, they are familiar with the old business ways, so they instinctively try to restructure the system to mimic their legacy application. Hence, the customization ‘inferno’ commences and often does not end well. What makes things worse (ironically) is that NetSuite as a platform is very easy to configure and customize. There is, therefore, a natural tendency to build functionality and less patience to learn what exists natively in the system and adjust it if required.

Furthermore, companies typically hire developers who are not business analysts and have little understanding of ERP systems. Within a year, the environment would be filled with code and workflows that overlap and bog down records and transactions.

The solution provider must warn about the dangers of over-customization and provide adequate training to keep NetSuite running optimally.

6. Inadequate Training:

The last reason implementations fail is the lack of training. Solution providers are typically at fault here.

Whether the reason is an aggressive timeline or budgetary restrictions, the key users may not receive any training until the end of the implementation. Usually, one or two weeks are dedicated to training, and then three to four weeks of user acceptance testing (UAT). Based on our experience, this is not enough.

NetSuite implementations are joint implementations. For best results, the client and solution provider teams must work together. Both parties must execute various tasks (where appropriate) so that

  1. The solution provider can learn the client’s processes.
  2. The client can get used to the system and become comfortable with its user interface and navigation. The training towards the end of the project reinforces certain knowledge gained during the configuration phase of the project.

Read more: Finding the Right NetSuite Consultants: A CEO’s Checklist

Leap Over ERP Implementation Hurdles with NetSuite!

Wondering how to navigate ERP implementation challenges successfully? Join forces with AlphaBOLD and unlock the power of NetSuite for your business. Let us show you how our implementation services can lead to seamless integration and operational excellence.

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We believe that training should start from day one, with the goal that the client fully owns the system shortly after it goes live. Only then can we assume that our efforts were not in vain and that our project was successful!

I hope this article helped you with your research. Feel free to comment and share your experiences with us. We would love to learn about your interactions with your implementers and assist you with any project-related questions or difficulties you face or are still experiencing.

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