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Why Some Companies Struggle During ERP Implementations.

Why Some Companies Struggle During ERP Implementations.

Nowadays having a proper system in place is a critical requirement. A company cannot survive with the growth over the years without a software which can assist companies with proper analytical information. But when it comes to ERP implementations, it has noticed there are certain companies struggle in bringing the project live. Shall we concentrate on what are the challenges faced by the companies during the implementation of a system?

 

  • Lack of senior/top management involvement
    • An ERP investment is a considerable value and getting the maximum return for the value need to be supported by the top management. You don’t need to invest lot of your time as it is understood the difficult with your busy schedules. But getting frequent updates (at least weekly), Participate for the steering committee meetings, involve in the critical decision related to the project,
    • Let you be the mentor for them who will encourage
    • Also, you need to provide your plans and vision for the next 5 years for the implementation team at the beginning of the project so that they will plan the mapping in line with it
    • Approve the required budget on time ex: Hardware or Cloud investment
    • Show your interest so that your team will automatically understand the importance of the investment where they will start contributing

 

  • Absence of Accurate Master Files during the required timelines
    • Many companies who are into ERP implementations are having this issue
    • This can be overcome easily with the dedication of the teams and the best way is to distribute the master file preparation into most familiar teams ex: Inventory Master by the Procurement and Stores Team, Chart of Accounts by the Finance Team, Supplier Master by the Procurement and Finance Team, Customer Master by the Sales and Finance team
    • When preparing the masters, the teams should concentrate on the reports they need to have ex: what are the filters required, what are the groupings required
    • Cleansing needs to be done before the finalization ex: Remove the duplications, Remove the unnecessary masters
    • Providing the master files ON TIME is also important as delays may cause project dragging

 

 

  • Absence of Accurate Opening Balances on time
    • ERP implementations take place with a planned cutoff date and as of the date opening balances need to be provided
    • Opening Balances include Customer, Supplier, Inventory, Trial Balance, Banks, WIP, etc
    • It is very important that the opening balances are in line with the provided masters
    • Also, there are common issues like Debtors Balances do not tally with the Debtors Control Account, Inventory individual balances total do not tally with Inventory Control Accounts, Supplier balances do not tally with Supplier Control Account, etc. These issues need to be sorted out by the finance team before providing the opening balances
    • If you have backlogs in Bank Reconciliations, these need to be completed before providing the opening balances
    • If there are issues in the inventories of the current system, the best option is to go for an Inventory Count. This way you will at least have the correct quantities in the new ERP System but be mindful that there could be issues in having the Per Unit costs on the inventories
    • With regard to the in-progress Projects/Jobs, you need to discuss with the Software Partner on how to proceed. Either you can have one common account for the in-progress projects and whatever the new projects coming in will be considered as new Job Cards or have Job Cards even for in progress Jobs

 

  • All the users not participating for the project activates
    • ERP implementation requires the users to participate for the activates. But the company operations need to run too.
    • The company management has to arrange timing schedules for the staff members to release them from day to day activities/operations to attend the project activities
    • This is specifically applicable for the Requirement gathering, UAT, Trainings etc
    • Is the users miss important session this may lead to gaps in the implementation Ex: if one user do not participate for the requirement gathering, his/her area might be missed and this gap will be reflected during the live run where no adjustments could be accommodated

 

  • Hardware and Infrastructure not available on time
    • It is important to facilitate the hardware and infrastructure environment for the project implementation work Ex: Server/Cloud, Internet, Network, SMS Gateway, Payment Gateway, etc
    • These may cause delays in the project timelines and make sure they are in line with the plan

 

  • Negative mindset
    • More than any of the above this is the commonly experienced challenge in most of the implementations
    • The management team of the company should make sure to give your team the right mindset as this will definitely affect the project progress
    • When a new system comes in there is a tendency for a negative approach by certain users which will spoil the whole team effort
    • Therefore makes sure you always talk to them, have pocket meetings, encourage them, appreciate them in their hard work, inspire them, etc

 

  • Not Flexible
    • Your investment on a system because you want to get the assistance form it in the future
    • Therefore do not let the users ask for the activities to conduct in the same way they do it now. Then what’s the point in going for a new system
    • Advise them to come with an open mind and embrace the changes as the well-known branded ERP systems are set up with the best practices in the world proven as effective and productive. Ask them to adapt to the system instead of expecting the same what they do now.

 

 

 

 

 

Anjana Wijesinghe
CEO – PBSS Group
anjana@perfectbss.com

 

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