9 Reasons Why ERP Implementation Fails

Warehouse with an empty cart, due to the fact that

Are you considering Odoo for your business? Well, you’re on the right track! Odoo is a fantastic ERP package that can do much more than most traditional ERP systems. However, just like with all other ERP systems, implementing Odoo can be a tough thing if you don’t do it right.

No one is immune to mistakes, regardless of size or industry. Examples of failed ERP implementations include even such big names as Nike, Hershey’s, Hewlett Packard, and Lidl. In fact, analyst firm Gartner estimates that 55% to 75% of all ERP projects either fail completely, or don’t meet their intended objectives. 

Failure can take numerous forms. Such as, disruption of manufacturing processes, going late or over budget, or failing to achieve the anticipated return on investment. But what exactly causes ERP projects to fail? Experts argue that the majority of ERP installation failures are due to people, rather than the system itself.

Below, we take a look at the 9 most common mistakes businesses make when implementing ERP, so you can avoid them when introducing Odoo, or any other ERP system of your choice, to your own business. 

1. Not having a clear vision of your desired ERP system

Any ERP project starts with discovery and planning. This includes selecting a system, setting up a project team, and defining detailed system requirements. You need to invest the time to identify decision makers, set reasonable expectations, establish lines of communication, ensure there’s a plan for your project, and customize the software to your business needs.

Before all, you need to have a clear understanding of why you want ERP. You need to have a clear, long-term goal for the implementation. Every business requires a unique strategy, and a unique set of modules and apps. Your ERP — be it Odoo or any other ERP system — should support your company’s goals and vision, and its architecture should reflect that.

2. Setting unrealistic expectations

Some business owners install Odoo (or any other ERP system) and expect fast results without understanding how to get the most out of the platform. And in doing so, they fail to estimate how much time, effort, and resources would be required, and for how long. Statistics show that ERP system implementation can take 30% longer than anticipated.

Any ERP system is a long-term investment. Trying to speed up the entire process, or to skip ERP implementation steps is counterproductive. You risk overlooking crucial processes and ending up with extra problems that you’ll have to remedy later. Set reasonable expectations and have some buffer time to ensure that your team isn’t rushing to reach unrealistic deadlines that would sabotage your new ERP’s overall performance.

3. Not having a plan

Many ERP implementation projects tend to fail because project teams don’t spend enough time to ensure that the project is completed. They forge ahead without a plan and without knowing what business goals they hope to achieve. Rushing headfirst without a clear plan or vision is a recipe for disaster, yet many businesses are doing just that. 

To be successful, you must first understand the scope of the project you want an ERP system for, as well as how to segment the project into smaller stages for easier management. 

You need a certain level of planning to determine when, where, how, and what for the system will be used.

Remember: businesses are meant to grow, and leaders are meant to balance the short and long term perspective. After you’ve established an MVP plan and covered your current objectives, it’s time to take the long view at your business’ future. Think strategically and be sure to incorporate growth in your ERP planning so that the system’s capacities can keep up.

 4. Not having a proper chain of command

It’s a common practice to exchange edits, opinions, and ideas when discussing a project. If there is no decision maker to guide the communication, it can quickly spiral out of control.

Too many cooks spoil the broth. Once you have everyone connected to ERP, you need to set a clear chain of command and assign decision makers to manage different components of your project. The larger your organization, the more critical it is to properly implement a change management plan to guarantee that ERP delivers the intended results.

Loaded warehouse as a result of ERP Implementation Fails

5. Failing to communicate

If project participants are in the dark about the project’s objectives, confusion might take priority over commitment, resulting in increased resistance to change and a decreased chance of success. Before starting any ERP project, make sure that everyone in your company, from decision makers to end users, understands why you’re doing it and how you’re going to do it. Be sure that all decision makers are on the same page about the need for change.

Another thing companies forget to do is to include employees (end users) in the implementation process, which often results in a misunderstanding of the system and low motivation to use it. You need to make your employees a part of the ERP implementation process. Let them ask questions and keep them updated. Collect input about users’ daily processes and discuss how to optimize them by using the ERP. 

6. Insufficient user training

Successful ERP implementation depends heavily on the users’ ability to use the system in their daily operations. Understanding the ‘how’s and ‘why’s will increase your employees’ motivation to use the system and to ultimately contribute to the system’s success.

Here, again, you need to determine what should be the pieces of ERP training done, who should attend the training, and who is responsible for managing user onboarding in your company.

7. Over-customizing your ERP system

One of the best ERP tips we can give is to be creative and explore! Here’s where Odoo ERP probably shines the most: it’s customizable, and you can make it do pretty much whatever you need it to do for you.

And yet, here’s the caveat: too many ERP customizations are a clear sign that your business is unwilling to change.

Implementing an ERP system is not only about the system itself. At the core, it’s about understanding and optimizing how your business operates. When businesses stick to their old ways of doing things, they tend to over-customize. Not only does the cost of implementation get higher, but the company also misses out on one of the biggest advantages of an ERP system, which is streamlining the business processes. Put time and effort upfront in organizing your business and consider the different ways  to simplify your business processes. After all, ERP systems are meant to make your business processes simpler, easier and faster, not the other way round.

8. Entrusting all the work to ERP development partners

Even having the best ERP expert on board does not guarantee successful implementation. Any ERP project is a team-up of the ERP professional and the company. It’s a complex undertaking, and you’ll be required to interact often, exchange feedback, and manage internal communications as well as change management. Implementation of ERP is bound to fail if there’s little or no communication from the clients’ side.

Make sure to sit down with your ERP developers to explore the system and set reasonable expectations for what can be accomplished. Explain your business to your implementation partner in full detail. Discuss how they will do things, and why they will do it the way they do. Learn from them. Be careful in defining your expectations. 

9. Choosing an ERP partner that doesn’t understand your business

The bigger and more complex your business is, the deeper understanding of it is needed. Whichever ERP you choose, you need to make sure to get in touch with an experienced consultant who can help you to mitigate the costly risks of ERP implementing failure.

Take Odoo for example: the Odoo implementation market nowadays is oversaturated with tons of Odoo developers who promise miracles but deliver very little. A vendor may also have expertise in certain specialty areas and some specific technologies, but not beyond that. Alternatively, a business may be so enthralled by a promise of a certain feature that they fail to see the full picture — and thus fail to unlock the true value of the ERP.

We can’t emphasize this enough: don’t let the software define your business processes. It is crucial that your chosen partners understand your business requirements well and align the software with your business objectives, not the other way round.

You need to choose the ERP implementation consultant that asks you questions and tries to understand your business. Make sure to provide your implementation partner with all the relevant information they need, so that they can tailor the solution for your business.

Bottom line

ERP systems are supposed to help you digitize and streamline your business. A successful ERP implementation starts with understanding your business, its processes, vision, and plans for the future. Every company has its own unique needs and specifics which need to be taken into consideration. Keep your expectations high, make sure to communicate, and you’ll have no trouble on your ERP implementation journey.

Considering Odoo as your ERP system? Interested in what Solvve ERP developers can do for you? Contact us and let’s arrange a meeting!