ERP Implementations Struggle: Why Do ERP Project Fails and How to Avoid Failures
“Unrealistic expectation is one of the root causes of why so many companies struggle in the ERP implementation and digital transformation endeavours.” Based on released articles and studies commissioned by software vendors or industry analyst paid by software vendors about mid-sizes companies, digital transformation have significantly helped SMB determine failure rates and success rates of a project in different conditions.
A case study about a Australian company, “Corporation Announces Second Quarter Financial Report for FY 19-20”, a mid-size manufacturing company with two to three hundred million in AUD dollar revenue year on year reported their third quarter 2019 results in which they highlighted their sales dropped by seven to eight million dollars aligned with how the dropped revenues was significantly tribute to a failed ERP implementation. Matters on margin decrease and unbilled customers in result of negative effect on revenue was an eye opening of how mid-size company struggle with their system implementation and the high risk of struggling because mid sizes companies doesn’t have the resources that some of the bigger organisations have, not to mention the unrealistic expectation of what it really is going to take the job done in an absolute correct manner.
Mid-market may not have as ample resources as ASX 250 companies it is still safe to say that they needed to parallel in digitalisation with the means of successful system implementation. One of the biggest lessons for mid-market is the importance of recognising that failures and risks are always present in any project — appropriately managing a problem and controlling risks are the first steps to scale a project for the company. Eventually, the case study about this local Australian company reminds us that failures are inexcusable and with the help of a ERP system implementation, billing a ship product, billing an invoice customer will lead to an accurate result and would increase company’s ROI.
The key notes with Australian company case are that even mid-size organisation needs to be very diligent about how they manage risk and how they manage system inaugurator or how they manage the project augment system inaugurator and risk of the overall project. The concept of testing and going live in the production would halt to the idea of losing sales, lose revenue, inability to track customer billing and inefficient cost for mid-size organisation. A realistic expectation can manage and mitigate pitfalls.
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