A project to introduce a new enterprise resource planning (ERP) system is not an everyday project for most companies and is only carried out every few years or decades at best. Therefore, the impact of such a project is far-reaching and can have a significant impact on a company's strategic, financial and operational performance. The careful selection, design and implementation of an Enterprise Resource Planning (ERP) system is therefore an investment in the future and of particular importance for the organization and the people involved.
An ERP project presents every company with a number of complex challenges, as errors or inaccuracies can quickly become serious problems that jeopardize the company's success. On the other hand, a successfully implemented ERP system can significantly improve company processes and thus increase competitiveness.
It is therefore crucial that managers and decision-makers consider the potential opportunities and risks in advance. Ten particularly relevant challenges in connection with an ERP project are presented below. Knowing and evaluating these aspects provides orientation and certainty in the decision-making process.
1. high workload
The decision-making process for a new ERP system is very lengthy and therefore requires a great deal of resources and time on the part of the decision-makers. First of all, a number of tasks need to be completed to select a suitable provider. These include determining the requirements, preparing invitations to tender, coordinating vendor presentations and evaluating solution demonstrations. This is followed by the implementation of the new system with a comprehensive process analysis and the step-by-step configuration of the system. Decision-makers and managers in the specialist departments usually have to complete these complex tasks in addition to their regular duties, which can lead to an enormous additional workload.
2. High time pressure
The time pressure when introducing a new ERP system is usually very high in view of rapidly changing business processes and changing market conditions. Technological innovations and competitive advantages through digitalization should not be missed, but rather exploited. This high time pressure entails the risk of decision-makers making quick decisions without being able to take sufficient time for a detailed evaluation of the various solution approaches.
3. Lack of market knowledge
There is a wide range of providers, functionalities and technologies on the market for ERP systems. In order to understand and evaluate the various options, decision makers need to have extensive market knowledge. Without time and knowledge of the latest trends, industry-specific solutions and emerging technologies, the system cannot be optimally adapted to the business requirements.
4. Lack of acceptance
The introduction of a new ERP system is usually accompanied by changes to existing working methods and processes. This can be an opportunity, but it can also present major challenges. When employees and managers have become accustomed to established processes, they are often reluctant to accept innovations. This internal resistance and lack of acceptance of the new system can delay the introduction, as more time is needed for persuasion, training and adjustments.
5. Lack of internal and external experts
Evaluating an ERP system requires a comprehensive understanding of areas such as project management, finance, sales, marketing and the value chain. However, due to limited resources or a shortage of skilled staff, it can be difficult for companies to find experts with the required expertise. Decision makers struggle to adequately manage the extensive aspects of ERP selection if they are not adequately supported.
6. Lack of methodological knowledge
A structured methodology and approach is particularly important when selecting and implementing a new ERP system. The complexity ranges from the definition of requirements and the development of evaluation criteria to the evaluation of demos and test phases. Insufficient knowledge of established methods for carrying out these tasks can lead to processes being unstructured and important aspects being overlooked.
7. Difficulties with standardization
Companies often strive for greater standardization of processes and data in order to increase efficiency and consistency. The introduction of a new ERP system can help to achieve such standardization goals, but the choice of the right system must be made carefully. A detailed analysis of the requirements and a comparison with the available system options are required.
8. Lack of product knowledge
In order to always receive relevant information, product demos and offers, it is important to have product experts in the project who are always informed about innovations from manufacturers. They can also check the relevance of the innovations for the current or past ERP project and incorporate them if necessary. If this product expertise and therefore knowledge of configuration and programming options is lacking, it becomes increasingly difficult to customize the solution.
9. Risk of operational hazard
The introduction of a new ERP system harbors potential operational risks, such as possible malfunctions or failures. In order to reduce such negative consequences during ongoing operations, decision-makers must ensure that a stable system basis is created at the time of introduction and that the implementation runs smoothly. This requires thorough planning, quality tests and training.
10. No independent contacts
Independent experts who can provide objective advice from an outside perspective are essential in the ERP selection process. If these experts and their perspective are missing, this can lead to increased uncertainty. Internal decision-makers, who are left to their own devices, find it difficult to fully grasp the ERP issue and view it neutrally from different angles.
How can these challenges be overcome?
The challenges show that selecting and implementing the optimal ERP system are demanding tasks. They require not only technological know-how, but also methodical skills and strategic thinking. With the ERP preliminary project "SPARK", ICB supports you in fundamentally analyzing and structuring the various aspects. The results of a SPARK are a helpful decision-making basis for investing in an ERP project and also provide a good basis for the start of the project thanks to the comprehensive overall view.
For more information on the SPARK preliminary project, download our white paper or book an appointment for a non-binding initial consultation.
