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Failure factors in ERP implementation

Having discussed about the success factors in the previous articles it is time to analyze on failure factors in ERP implementation.

FAILURE FACTORS IN ERP  IMPLEMENTATION :

  • ERP implementation is, at its core, a people project : The biggest challenge before and after implementation is not the technology; the biggest issues are related to people. At every stage, companies must work harder to manage change, secure buy-in, communicate with and educate their employees. Top human resources issues are related to changing management, training and internal staff adequacy.
  • Employee Resistance : If the employees are not educated and informed about the benefits of the ERP system and assured about the security of their jobs by the top management, they will start believing in the rumors that float around and will either resist or sabotage the ERP implementation.
  •  Lack of top management commitment : The top management should pledge and demonstrate that the ERP implementation has its full support. They should assure the employees about their jobs, clear any doubts and explain why the ERP system is a necessity for the organization. The CEO or some senior level manager should sponsor the ERP project in order to demonstrate the management commitment.
  •  Inadequate training and education : All users of the ERP system should be trained properly in using the system to its fullest. Different groups of people in the company will have different training needs. Managers need more focus on the decision-making and analysis features of the system, while the clerical staff need more focus on how to perform their jobs. But all the users must be trained in the ERP basics, overview of the system and its working, how an action by an employee triggers a host of events through the organization, how automation will help, what processes are changed and so on.
    When the employees do not understand what the new system is and what it is supposed to do and how to operate it, they will not use it or use it incorrectly. This can lead to failure of the system. Train process owners (department managers) in how to use the system. Have them train the users.

Also Read – ERP Software in the paper industry

  •  Inadequate requirements definition : If the requirements of the new system or what is expected from a new system are not adequately defined, then the implementation team will find it very difficult to plan the project. Only if the requirements are specified correctly, the ERP package that is best suited can be selected.
  •  Inadequate resources : ERP implementation is a complex, costly and lengthy project. The initial budgets are very often exceeded and there are still many hidden costs in an ERP implementation. So, while preparing the budget and allocating resources for the ERP implementation care should be taken to consider all the factors that could affect the costs, manpower requirements, infrastructure needs and then reserve a reasonable amount of buffer of buffer for any contingencies that might occur during implementation.
  • A poor fit between the software and users procedures : If the selected package is a poor fit then either the organization has to change its business processes or the package has to be customized to follow the organization’s processes. If the company’s processes are efficient and cannot be changed the only option is to customize. This is a time-consuming, costly and error-prone process. So while selecting the ERP package care should be taken to select a package that offers the best fit with the company processes.
  •  Unrealistic expectations of the benefits and the ROI : ERP systems are capable of producing dramatic productivity improvements if successfully implemented and properly operated. But expecting ERP to perform miracles will be asking for trouble. The management and employees should be made aware of the benefit so that there are no over expectations. If ERP is touted as a panacea, then there will be dissatisfaction and disappointment about it, which can lead to failure of the system.

Also Read – Which ERP solution is best for EPC contractors?

  •  Poor ERP package selection : If the right package – the one that is best suited for the company – is not selected, it will create a lot of problems for the implementations and customization teams as well as the end-users and will result in failure. Choosing an ERP package that is not suited for the company or one that will require huge amounts of customization is one of the major factors that contribute to the failure of the ERP project. So the package selected should be one that addresses the basic business functions of the organization.
  •  Extensive customization : Be prepared for people to argue that they need to customize a report or tell you that your new software does not accommodate the way your company pays invoices. However, you should always challenge those arguments aggressively. Most companies can live with standard business processes. When you over-customize an ERP installation, you not only add time and costs, you also make installing the next release of the ERP software increasingly difficult and costly.
  • Change management : Long and expensive customization efforts often result in the lapse of the release deadline and budget overrun. Customizations make the software more fragile and harder to maintain when it finally goes to production. Major changes may be required in the later stage of the implementation as a result of incomplete requirements and power struggles within organizations.
  •  Failure of accommodating evolution of business processes : Business process fall into three levels – strategic planning, management control and operational control. Organizations continuously re-align their business processes at all levels in response to the ever-changing market environment. Many ERP systems are not flexible enough to accommodate evolution of business processes. An ERP system that worked well last year may need major overhaul.

Also Read – Best ERP software for the oil and gas industry

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Set targets, Establish Budget and Make It Happen

Set targets and Budget Before ERP Implementation

  • Phased approach: It is important to break as ERP project down to manageable pieces by setting up pilot programs and short-term milestones. Depending on the IT experience, some organizations choose the easiest piece as the pilot project, while others may implement a mission-critical application first. The pilot project can both demonstrate the benefits of ERP and help gain hands-on ERP implementation experience.
  • Data conversion: Second generation ERP systems use relational database management systems (RDMBS) to store enterprise data. If large amounts of data are stored in other database systems or in different data formats, data conversion is a daunting task, which is often underestimated in ERP implementation. A two-hour data conversion task could be turned into a two-month effort as a result of the DBA group’s lack of technical experience and the management’s incompetence or ignorance.

Also Read – Why is ERP system important for solar industry

  • Organization commitments: The involvement of ERP implementation goes far beyond the IT department to many other functional departments. The commitment and smooth coordination from all parties is the key to the success of ERP project. The commitments come from the understanding of how ERP can benefit each functional department. For example, if the warehouse staff is not completely sold on the benefits of the inventory control module, they may not input the kind of usage data that is essential to the project’s success.
  • Create partnership between your software vendor and your stakeholders: While this concept may seem obvious, it has been found that the vendor-client relationship is often contentious and sometimes outright hostile. This fact is particularly true if the organization is severely divided regarding the choice of vendor software. As problems arise during implementation, and they will arise, the blame game often begins. Before long, the project evolves into a standoff with neither vendor nor client willing to admit fault. A third-party project director or manager is often the best solution for this dilemma. This person can usually serve as an objective mediator to bring the parties together, finding solutions, rather than allowing the project to slow down to a crawl.

Also Read – How ERP software is beneficial for pipe manufacturing industry

  • Sell, sell, and continue to sell the ERP to your stakeholders: Implementing ERP systems are extremely complex and take months or even years, to implement it. If your stakeholders understand the long-term benefits of the system, they are much more willing to accept any perceived temporary steps backward.
  • Build and leverage process expertise: Process focus is if anything, more important after going live since the company now has an even greater core of process expertise. Successful companies fully capitalize on this expertise and the power of ERP-enabled process. One way is by sending process experts from the implementation team back into the organization, or by having some serve at centers of excellence, some as key process performers and some as business managers. Successful companies never forget the point of the integrated enterprise – that it is not about ERP so much as it is about people involved in ERP-enabled processes.
  • Adequately resource your project: Ensure that replacements are in place to release key team participants. The people who do the daily work of running functional departments are the same people who will be essential to implementing an ERP system. No surprise. The people with the most knowledge will be needed for the majority of the project. Priorities will conflict between the demands of the office and demands of the project. The most effective solution we have seen is hiring or contracting with additional resources to serve as back-fill for key office personnel. Admittedly a new resource cannot do everything that an experienced resource normally does; however, the replacement can handle routine work and coordinate with the experienced person for critical decision.

Also Read – How can ERP system help the cosmetic manufacturing process?

  • Define metrics and manage them: ERP systems are capable of producing dramatic productivity improvements if successfully implemented and properly operated. But expecting ERP to perform miracles will be asking for trouble. The management and employees should be made aware of the benefit so that there are no over expectations. If ERP is touted as a panacea, then there will be dissatisfaction and disappointment about it, which can lead to failure of the system.
  • Communicate and manage expectations at go-live: Many stakeholders in the organization expect the ERP to be an ‘everything for everybody’ solution. Even in the best-case scenario, this is rarely true. And inevitably, some functionality must often be re-scheduled into a post “go-live” phase. All of this combined could crate disillusionment with the new system. If the project teams are struggling to meet deadlines, they may have to make decisions on the functionality that needs to be delayed in order to meet the original “go-live” date and avoid delays. These decisions must be communicated and “sold” in the stakeholders to ensure expectations are effectively managed. The organization needs to know what will be in place at “go-live” and when they can expect the additional functionality.

Read More – ERP for civil contractors

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Make the best use of consultants’ knowledge

Best Use of Consultant Knowledge

  • Implement pre-project readiness assessment and overall project planning: Most organizations have never been involved in a project as complex and cross-functional as an ERP implementation. Additionally, an ERP project requires near full-time participation. A readiness assessment conducted prior to the project kick-off can help identify areas of strength and potential problem areas in need of improvement. This information is extremely helpful when planning the project budget and the project tasks.
  • Implement aggressive project management processes: The magnitude of an ERP implementation requires aggressive and structured project management processes. An ERP implementation is complex and touches virtually everyone in the organization. Without the structure of project management processes and without a project manager who understands this methodology, the project runs significant risk in time, quality and costs. “Go-live” dates could be missed and the credibility of the project team and the ERP software itself could suffer dramatically.

Also Read – Why automotive manufacturers must use ERP system

  • Create a project organization structure to provide planning and quick response for decision-making and issues management: The toughest problems with any project implementation involve people issues. Pre-project planning must include the creation of clearly defined roles and responsibilities. The following critical roles need to be filled by qualified people: project sponsor, project director and/or project manager, functional team leaders, technical team leaders, project coordinator/scheduler, etc. These people must have dedicated time to the project and they must be willing to be accountable for dealing with issues and making timely decisions. Many ERP implementations become paralyzed when issues are put on hold and are not dealt with quickly.
  • Make the best use of the external consultants and experts: These people are paid huge amounts of money for helping you in implementing the ERP system. So you must make the best use of their knowledge and skills and ensure that the knowledge transfer is complete before they leave the project.
  • Teach the organization to use new capabilities: The natural progression from building capabilities is actually using them. While this may sound obvious, many organizations are far better at building new capabilities than at teaching (and motivating) people to use them. Successful companies avoid this fundamental imbalance. For them teaching goes hand-in-hand with building new capabilities, from defining roles to developing skills to culture shifts.

Also Read – ERP Software in Nigeria

  • Implementation review: This review must be performed after users are competent with the system. The goal is to ask the software vendor to suggest better ways to use the system.
  • Assign clear ownership of benefits: During implementation, it is usually clear that the responsibility for going live-on-time and on budget-ultimately belongs to one person, the project leader. But after going live, who owns the benefits that are being targeted? In many companies, this is a difficult question to answer – no one is identified as the owner. But in successful companies accountability for results is no mystery. The owner may be the business unit leader, a project sponsor, a process owner or someone else. What is important is that there is somebody whose responsibility is realizing the benefits.

Read More here – Which is the most common ERP software used in dubai

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Auto components manufacturing industry has a bright future

Benefits of ERP for Manufacturing Industry in India

The growth of auto component manufacturing industry in India is showing a positive trend for the couple of years and the trend is going to continue for years to come. This trend is giving a tremendous opportunity for the automotive components industry in India to rise to the occasion and serve the global automotive parts and components market through exports.

According to reports, with this healthy growth rate, Indian automotive components industry is pegged to accrue an impressive US$100 billion in revenue by 2020, with expected exports in the region of US$35-40 billion.

However, to keep pace with the growing industry needs, the auto components manufacturing companies in India need to upgrade their working system which could cope with growing demand of world market. Deployment of an effective enterprise solution is the need of the hour in many of these companies. eresource, is one of best ERP system for automotive industry which serve almost an decade now could be a right choice for companies in India to overcome any challenges.

Also Read – Which ERP solution is best for EPC contractors

eresource Web-based ERP Software is a fully integrated ERP system to Improve business processes, enhance collaboration, and boost competitive advantage. It is not an exaggeration to say many of the auto component manufacturing companies in India is looking for a reliable ERP solution and most of them are happy to be the beneficiaries of eresource. Not only auto component industry but also every industry is looking for an ERP solution to run their business smoothly. eresource ERP system serves as the foundation for daily customer interaction and execution in many areas, including material requirements planning, inbound delivery, goods receipt, production, delivery note creation, shipping, billing documents, and invoice creation and settlement.

Keeping your organizations business process system compatible with the changing world business environment is an absolute necessary for the existence this industry. And most importantly, this industry is also one of the largest employers in the country along with a high concentration of export and should get special status and incentives from the government for a level playing field with other Asian counterparts. Therefore, be equipped with the best technology components to be in the forefront of any tough competition.

In the eve-changing ever-growing and competitive marketplace, it is very important for Automotive manufacturers gain operational excellence. eresource ERP gives you visibility into strategic information at every juncture, which help you to take timely decision. Excellence regional markets are saturated and global capacity exceeds demand. While seeking to protect today’s business by adapting to changing customer requirements, suppliers are also trying to invest for tomorrow so that they can grow and expand into new markets.

Also Read – Choose the best ERP software for the electronics manufacturing industry

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A competitive ERP system for industries in Coimbatore

A competitive ERP system for industries in Coimbatore

Serving a wide range of industrial segments: Our manufacturing ERP product, eresource Xcel, that is being designed to match with all kind of business process of manufacturing companies going to be a big assistance for companies in Coimbatore. With the implementation of eresource Xcel ERP system in manufacturing companies, every function of these companies will become quick, flawless and transparent. The system is made to suit industries like Engineering, Manufacturing, Textile and Food Processing that have huge presence in Coimbatore.

All these industries in Coimbatore need quick exchange of critical information between various sections, branches and locations that will enable the managers and other decision makers to act promptly and timely. This timely action can help companies achieve steady growth. Once implemented, eresource ERP system will support you every step of the way in your business functions.

Being one of the most trusted ERP solution provider in India and in many other overseas countries, eresource ERP system has the appropriate architecture, customization features, installation procedures, and level of complexity.

Also Read – Significance of construction ERP software in UAE and India

Deep understanding of industry best-practice

Our professionals work closely with your company IT heads to ensure that you have the correct suite of integrated applications to suit your needs and budget. eresource ERP system helps to identify and plan the enterprise-wide resources you need to best serve your customers. With a deep understanding of industry best practice, our professionals can guide you to procure and help you go for right modules and customization wherever required. Our cost-effective system could bring a tremendous changes and growth in your business in a short span of period.

eresource, one of the most widely accepted ERP solution in India has many clients in Tamil Nadu that includes Coimbatore. Having our registered office in Mumbai, we have a branch office in Chennai. Our wide range of enterprise solutions includes various exclusive ERP product for many industry verticals CRM Software and HRMS. We also serve the logistic industry with our unique ERP solution known as eresource 3GL, which a very popular among transportation companies. Our services are customized to suit the preferences of our customers and enable optimum efficiency and performance. eresource product is also famous for its affordable prices and quick implementation process.

For more information on all our ERP products, please calls us now or write to us.

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eresource ERP 360 – an Enterprise Solution that can take you to new business heights

eresource ERP 360 – an Enterprise Solution that can take you to new business heights

eresource ERP, one of India’s leading and award-winning Enterprise solutions is a web-based business software that is designed to benefit the entire workforce in your organization to work together smoothly and efficiently with one integrated system. eresource offers both Off The Shelf and industry-specific customisable applications to meet the exact requirement of customers’ business process and terminology. You can request for a LIVE DEMO of this economical, powerful and easily implementable web-based ERP system and feel how this application can be helpful to your organization.

eresource, a ERP 360 system provides a lot of working freedom to organizations. Many major organizations as well as as small and medium companies are in our clients’ list. These companies have implemented eresource ERP system as a cost effective alternative to their manual procedures or their piecemeal software applications.

Under-performed legacy system and cost-factor involving the customization of existing outdated ERP systems in many companies are making the business process a time consuming exercise and, in many cases, impractical.

Also Read – ERP for Plastic industry

Keeping with our practice of moving ahead with the changing technology environment, eresource applications are getting updated on on regular intervals. Our aim to provide industry-specific ERP system for every Industrial verticals are getting fulfilled with introduction of eresource Xcel, eresource nfra, eresource Life Science, eresource e-Trade, eresource 3GL and eresource WMS etc. We have also recently developed exclusive system for Accounts and Finance, HRMS, PMS and Excise etc. that are the products that have been placed under our Off The Shelf option.

All our systems have been incorporated with triggers, alerts and workflow procedures that ensures operational efficiency for any business. Being a web-based ERP system, implementation is not a cucumbersome process like in many other ERP packages. All customer-specific functionality has been included in the system effectively. Although eresource ERP systems have been developed in keeping with the Small and Medium Enterprises in mind many large-scale organizations in India and in Middle Eastern countries are opting for eresource today.

Also Read – How cloud based erp software help the construction industry?

The prime reason why eresource is concentrating more on SMEs is that the SME segments are the ignored sector by the large players in the ERP market. However this attitude of big ERP players towards SME segment has helped ERP firms like eresource Infotech realise the need of an economical and reliable ERP system for this sector. And the result is the birth of one of the most flexible and affordable ERP software in India — that is eresource.

It must be admitted that developing such a package was not easy. As everyone knows that meshing the specific needs of thousands of customers into a single coherent package was not that easy. But eresource’s top quality expert to sift through this mature package, incorporating a massive volume of functionality processes as required by the customer. Being a web-based ERP solution, eresource has simplified the implementation process and it brings efficient operational methods and return on investment (ROI).

Also Read – ERP for automotive

In spite of its benefits one of the most important factor to be remembered is that ERP is not a just another software application in your organization. The system involves every internal process and must be preceded by a reevaluation of every section together with its functions. It is also important to note that the ERP system will not change the management functioning on its own. You must keep in mind that it is an important and decisive tool, but in order to obtain a correct development you will have to decide carefully who is going to command it, as well as the way in which the data will be saved and how information will flow.

Just implementing an ERP system alone won’t help the organization make any success. Though the effectiveness of an ERP system could be measured by the improvement in the ROI, the goal of measurement is not to measure; rather, it is to improve performance and processes are the point at which this can be best accomplished.

A well-performed ERP system can be maintained till about 15-20 years. In the later stages the package will have old architecture. It will become very difficult to make changes in the program code without inflicting hazardous damage to the system’s stability. It is possible to give older systems a ‘facelift’ with modern tools.

Also Read – Key benefits of ERP software for the food and beverage industry?

Though those ‘facelift’ can extend the life cycle of the package for some years, they will certainly speed up the appearance of the useless codes. If your ERP system is under-performing, it is better to go for an overhaul of the system. Do the right evaluation as per your requirement and implement a suitable ERP system that could take your business success to new heights. As the saying goes – It is better late than never.

Mail Us at sales@eresourceinfotech.com for Live ERP Software Demo