Set yourself up for ERP implementation success by understanding the critical factors that can make or break your project with expert insights from the Kwixand Solutions team.
A successful implementation of an enterprise resource planning (ERP) system has many benefits for an organization, from streamlining daily operations, reducing costs, increasing financial visibility, removing silos, and advancing productivity and efficiency throughout the business. As it manages a company’s critical business processes, it’s imperative to get the implementation done right the first time.
An ERP implementation project is a big undertaking for an organization and a period of great concern as worries around organizational disruption, budget overruns, project delays, or failure to achieve ROI abound. These concerns are valid to some degree, as many ERP projects get derailed along the way, especially in those companies that are implementing an ERP system for the first time.
In this article, ERP implementation experts, Brian Paquette, CEO of Kwixand Solutions, Sebastian Alexander, Director of Professional Services at Kwixand Solutions, and Jens Baun, Director of Sales at Kwixand Solutions offer key insights into the reasons why ERP implementations fail, the critical factors behind a successful project, and how to find the right ERP partner for your project.
Why Do ERP Implementations Fail?
If we define ERP implementation failure as a project that exceeds its budget, misses its timeline, or fails to meet the agreed-upon quality, then 80% of ERP implementation projects are bound to fail, according to Jens Baun, Director of Sales at Kwixand Solutions, citing poor planning and unrealistic expectations around the budget and time commitment as the top causes.
Companies need to have a realistic understanding of both the timeline and budget, which are closely tied to the complexity of their project. This requires careful planning and due diligence when it comes to considering costs and factoring in fees, time, and the allocation of additional resources when necessary. They must also account for the time investment required from the client side, ensuring sufficient internal resources are dedicated to meeting deadlines and achieving project success.
“If it’s not well planned, it’s guaranteed to go sideways. The wheels will fall off. If a project, any kind of implementation, is underfunded, underbudgeted, and that’s in terms of time, money, and skills, it will go wrong,” says Baun.
Another leading cause of ERP project failure is the lack of buy-in, shares Sebastian Alexander, Director of Professional Services at Kwixand Solutions, “The ERP solution is only as effective as the users who are going to end up with it. So if [the company] has not solidified the buy-in and properly communicated from the top down to the lowest levels what exactly this initiative entails, what the pros and cons are, and what they’re looking to address, to foster that excitement and buy-in, the project will fail,” he explains.
Finally, a lack of end-user training can also contribute to an ERP project failure, as end-users use the new ERP system wrong or have low levels of adoption. Investing in proper training, well before the system goes live, is imperative.
What Factors Are Key to a Successful ERP Implementation?
There are three main foundational pillars to have in place to have a successful ERP implementation, according to Alexander.
The first is selecting the right ERP solution for your company that is scalable and extensible. “The customer knows what their two- or five-year road map looks like, from an IT perspective,” he explains. “Ensure that due diligence is performed, and all [relevant] solutions are looked at to ensure you purchase a system that will scale as your company scales.”
The second success factor hinges on having buy-in for the new ERP solution. As mentioned previously, you need buy-in from executive stakeholders to your end-users. Identifying who is averse to change or digital transformation so you can proactively create a change management program or initiative is extremely important for success.
The third factor is ensuring your company has clear objectives and goals. “Not just within the ERP implementation itself,” says Alexander. “But even before you’re selecting the system. What exactly are you trying to achieve?”
Baun suggests companies should hold internal meetings and figure out what they’re looking for. “It is the most important thing to understand what you need,” he emphasizes. “Because if you don’t, how will you explain that to an ERP partner? And how will they deliver a solution that will meet your needs if so.”
By using these pillars as a foundation for when you run through your selection process, vetting process, and implementation process will help keep everyone accountable and take ownership.
Finally, Baun also stresses the importance of having a steering committee for your ERP project to help manage expectations from the get-go all the way through, avoid scope creep, and maintain alignment between internal stakeholders and the ERP partner.
What Questions Should a Company Ask Potential ERP Implementation Partners?
Selecting the right ERP implementation partner is an important step as you want to align with a partner who can not only deliver your project successfully but also help you achieve your business objectives. So what are some questions you should ask a potential ERP partner?
It’s important to vet whether the potential ERP partner has the proper specialization and expertise in your business area, according to Brian Paquette, CEO of Kwixand Solutions. “Do the partners have an understanding of the area of business your company is in? It doesn’t necessarily have to be specific to your niche, but for example, if you’re a manufacturing company, you want to be looking for manufacturing expertise…Do they have supply chain experts on their team? Do they have proper certified professionals in the areas of customization they want?” says Paquette.
Another point to clarify is understanding how the partner communicates with your team. “Because there will be challenges along the way, which is expected, but as long as the communication channels are open and straightforward, you can overcome those,” shares Paquette.
The ERP partner should have references they can share, and you should seek information about previous projects and implementations to figure out their track record.
It’s also worth figuring out whether the partner can offer services beyond just implementing the core system. “You want to be looking for a partner who will provide you with a solution that works for your business, not just implementing a system,” says Baun. “When you’re talking ERP implementation, it is an out-of-the-box system. However, you need to have it tailored and configured to reflect your requirements and to provide you with value from those configurations.”
Finally, it also boils down to trust. You need to be working with partners you can trust and who understand your culture and values. “Start getting to know potential partners by having a couple of meetings and conversations to see if your values align,” advises Baun. “One red flag I would watch for – if you ask two or three different partners for a ballpark estimate for your project and one of them comes back with a number that’s ridiculously low.”
Brian Paquette, CEO of Kwixand Solutions, Sebastian Alexander, Director of Professional Services at Kwixand Solutions, and Jens Baun, Director of Sales at Kwixand Solutions have decades of experience in ERP implementations across various industries. Visit our About page to learn more about their experience and values.
Planning an ERP Project? Kwixand Solutions Can Help
ERP implementations can fail and underdeliver on value – but that doesn’t have to be your experience. By keeping these key factors in mind and teaming up with the right ERP implementation partner, you can achieve ERP implementation success and transform your organization effectively.
Got questions? The team at Kwixand Solutions is happy to help and guide you through the ERP journey. We're a Microsoft Dynamics 365 Partner, and our team of highly experienced consultants bring over 50 years of combined experience helping businesses across North America digitally transform.
