Enterprise resource planning (ERP) is an effective tool of integrating all the departments under one central system. One can benefit by effective planning and setting predetermined and measurable goals. Most organizations fail in its implementation because of lack proper planning, resources and top management commitment in its execution. In this article, you will see the challenges that organization face in ERP implementation.
- ERP is a modular software system that contains many functional modules. The issue in ERP implementation is knowing what modules need to integrated and what not to be. And the other issues is integrating the modules from multiple vendors or the different versions from the same vendor.
- The other issues of ERP implementation is integration with other business software like Business Intelligence, Information Management System, Customer Relationship Management, Supply Chain Management etc.
- It is very difficult to integrate the legal system with the ERP system. It requires third party interface software to transfer the data between the system.
- It is difficult to know where the integrating system gains competitive advantage and where it hinders the work flow.
Time consuming and Expensive:
- It takes long time to understand the business process, key business requirements, potential problems and others. This are required for effective ERP implementation.
- It is expensive too because along with the cost of ERP implementation, you may also to need to invest additionally on sever upgrade, database software, network infrastructure, authentication server, training cost, supporting cost, maintenance cost etc.
Unclear business requirements: Lack of understanding the key business requirements, most of the organization are facing failure in ERP implementation. Because the business requirements are the one need to match with the ERP technical capabilities.
Experience of Past implementation: Most of the organizations show resistant to ERP implementation especially when they hear unsuccessful and failure stories from the implemented organizations. This is the reason why they face problem in selecting the right ERP system and right ERP vendor for the organization.
ERP implementation goals: The biggest challenge in the ERP implementation is lack of well-defined measurable goals and objectives. Here where the most of the projects fails. So, you need to first set-up clear goals and objectives of its implementation which helps your organization growth and development.
Lack of competitive benefit: It is not a package solution, but a framework with which organization need to build a comprehensive solution for its business.
Flexibility of ERP system: It is not flexible, organization has to force to change its business process to align with the ERP system. For that company need to go for business process re-engineering (BPR) to complete tasks and for retraining employees, business partners and customers. Another challenging thing is people will resist to change their job roles and behavior which they are working for many years.
Lack of top management commitment: Most of the times, it starves for the resources and funds from the top management. These are the people who are responsible for taking decisions, setting directions.