ERP implementation projects require a strong team, leadership support, a targeted scope, a realistic budget, and training. Implementing an ERP system is one of the most challenging projects your business can ever take on. So, how do you make your journey to the cloud as smooth as possible?
If you want to ensure a successful ERP implementation, there are ways to avoid possible challenges. Let’s find out what the challenges could be and read on for some tips on how to implement ERP successfully.
Why resistance happens in a company
Since ERP can centrally manage and visualize a wide range of companywide information, the implementation is often decided on the needs of the management.
However, as improvement of business processes at the site is also actively considered in an implementation project, old business procedures may be changed, and employee cooperation and alignment of consensus become necessary.
Of course, an ERP also has many benefits for the field, such as possibly reducing workload and sharing information that could not be done before then. For example, it becomes possible to batch-load the complicated data input work that was done manually in the past.
However, since ERP is like building a new office or moving a company, there can also be a psychological resistance from those who feel anxiety from the uncertainties involved with the change. As a result, when such emotions are entangled with other factors, it becomes a great resistance, hindering the project from making any progress.
So, what kind of resistances are experienced?
Although there are some variances, the following are typical resistances experienced in starting an ERP implementation project:
- Sense of job security
- Hesitation towards new screens and business procedures
- Anxiety surrounding new vendors and new systems
From here, we will explore further on above points.
1. Sense of job security
By job security here, we are referring to motives of old employees that have established their position in the company by hoarding knowledge that only they can understand in order to prevent themselves from being fired. Such behavior is often seen with old-timers that worked for many years in small and medium-sized companies.
The person may not have intended to create such situation, but from BCP perspective, having such an employee that creates a black box within the company is a big risk for the business.
While a new ERP can standardize and improve the efficiency of an operation, companies with personnel like above may resist the idea due to the fear of losing job security. The possibility of relocation or employment becoming jeopardized can make the person desperately resist a new system in order to protect their position in the company.
2. Hesitation towards new screens and business procedures
Common complaints that are often heard as a voice of resistance are that the new system can be too difficult to understand, the new operational method is too troublesome to learn, or that it is more complicated than existing work.
There is some truth that changing the system will put a temporary burden the user, even just by the notion of it.
If there is a defect or problem in the system design or functions such as the screen, business flow, operational procedure, message, or manual of the new system, there is no choice but to functionally handle it, but a large essence of the problem can actually be psychological.
As a measure to mitigate such resistance, we may settle for customization or add-on functions at the system function level, but if the essence of the problem is not handled, it may as well not work as a solution either. In addition, the initial investment for these additional measures will be excessive, and the running cost and difficulty of version upgrade, as well as the risk of malfunction from expansion of the system size can increase. All in all, we don’t recommend it.
3. Anxiety surrounding new vendors and new systems
There are many cases where a new vendor or software is selected when implementing a new system. However, for those who were not involved in the vendor and software selection process, being imposed with a change that they didn’t call for can be a cause of anxiety.
In addition, users who have not felt inconvenience until then are likely to have a bias to think that the old system was more convenient and easy to use, and may show resistance when they find that the new system has functions and access privileges that are no longer available, or work time restrictions and processing speed has changed.
The secret to successful ERP implementation
As mentioned above, even if a new ERP system does bring an overall optimization and profit to the company as a whole.
Therefore, in order to successfully implement an ERP, it is essential to fully understand the people involved, align them together, patiently explain the merits for the whole company.
Key steps for Internal kick off and preparation
From here, we will explore four points that we think are important when proceeding with an ERP project.
A) Determine scope and clarify goals
Since an ERP implementation project involves various stakeholders, it is important to clarify what the goals and objectives are, and to share a common understanding with them.
At the planning stage of the project, it is important to gather opinions from various parties. However, it is important to keep in mind that trying to please everybody can lead to the project scope becoming too wide and uncontrollable.
To prevent this, it is essential to thoroughly analyze the content, discuss, and clarify priorities during the requirements analysis phase.
Since investment for ERP is not small, and its implementation requires a modest level of difficulty, we highly recommend you consult with a certified partner. At Calsoft Systems, our consulting department can provide project management services and support your project to be successful.
Specifically, we create a project roadmap based on customer priorities, divide the project into several phases in med to long term, build a comprehensive IT strategy and establish solutions for constant improvements.
B) Involvement of key person
In order to make a project successful, it is necessary to determine what is essential as a key success factor and how to realize them.
We identify key people in their respective fields within the company and determine how to best involve that person for decision-making. Aside from department leaders, a lot of companies have key players that play major roles, and the cooperation of such individuals is essential for the success of an ERP implementation project.
Even when a problem arises with the project, by having cooperation from such key players, we can get them to act as an ally in getting other key members aligned to resolve the situation.
At Calsoft, when implementing a project, we establish an appropriate meeting body and communication scheme based on key members on the customer’s side, making communication with appropriate method and frequency.
C) Understanding and cooperation from users
The consent and cooperation of the users who oversee operations is essential for the success of an ERP implementation project. Therefore, it is important to understand the issues faced in the field and provide solutions to improve the productivity of corporate squadrons and operations, and to share the benefits of the project with key members.
Conversely, if you forget this perspective, a project will become increasingly difficult to receive understanding and cooperation from users.
It is important to define the purpose not only from the manager’s point of view, but also from the user’s point of view in order to achieve overall optimization. Of course, it is not possible to proceed only with idealism, so focus on working with the vendor to communicate with the field and hold repeated meetings to provide the optimal solution.
D) Commitment of management and project manager
Corporate management and ERP implementation projects are all done by humans, and all of them are decided by the “thoughts” and “will” of the people involved.
Therefore, in ERP implementation projects that involve the work and division of roles of various people, the leading management and project managers must have a strong will to make sure that ERP introduction is successful and lead to business and management improvement.
Even if there is a resistance in the company, if the management has a strong sense of ownership, leadership and commitment, it will be a great force to lead the company and overcome any difficult situations.
To tackle challenges in this area, project managers need to know what to do before they begin. And if they are unsure what to do to make a project successful, partners like Calsoft offer consultation and training services.
Finally, since an ERP implementation project seeks to optimize the business holistically, it is necessary to proceed with not only the management’s perspective alone, but to obtain a cross-functional cooperation system.
In addition, many members in overseas subsidiaries and branches tend to have many concurrent duties, not being able to move exclusively for the project. However, it is necessary to obtain a commitment, to avoid half-baked involvement.
At Calsoft Systems, as an external vendor, we don’t just manage our own resources and tasks, but we actively communicate with the customers’ project members and manage resources and tasks on the customer side as PMO (= Project Management Office) service.
Calsoft Systems has implemented ERP packages such as Microsoft Dynamics 365 and provided operational support to over 300 companies. Each project had its own challenges, but we always approached them upfront and resolved them one by one. Based on our experience, we’ll explore how “internal cooperation” is one of the essential factors to successful ERP projects. It is critical to have a strong ERP project management to make sure your implementation finishes on time and on budget, and continues to deliver business benefits.