How to turn ERP implementation into a success story?
For quite a long time companies have been aware of the need to innovate, modernize and digitalize their operations. But 2020 has shown that they need to accelerate their digital transformation journey now more than ever.
Automation and Digitalization will become imperative in 2021
Terms like RPA, Cloud, AI, machine learning, and predictive analytics are not just buzzwords anymore. Companies need to adopt new technologies if they want to become competitive in today’s ever-changing world.
As Forrester says,
- “In 2021 Digital transformation at more than 75% of enterprises will focus on automation”
- “20% of enterprises will expand investment in intelligent document extraction.”
- “One in four forward-thinking enterprises will stretch AI to new frontiers.”
Investments in digitalization are inevitable, but they can quickly turn into failures and financial black holes. Digital initiatives must be understood as complex projects that focus on the process as much as the technology. You simply cannot automate a process that is already broken. You cannot benefit from predictive analytics tools with messy data. You cannot provide flexible real-time reporting with various unintegrated legacy systems. Companies that want to go digital must first review their process and revisit their outdated ERP systems. Implementing an integrated ERP ecosystem is a pre-requisite for digitalization in the modern era.
The question is not IF or WHEN …but HOW
Many companies fear big transformation projects, and they might have a valid reason. A Gartner study shows that up to 25% of ERP initiatives are considered failures, and another 55-60% result in considerable gaps between user expectations and the actual delivery.
There are various reasons why ERP implementations fail, including insufficient leadership commitment, poor project management, unrealistic expectations and resistance to change. But all of these have a common denominator: a strong technology-centric approach.
It’s all about people
ERP initiatives should be managed as a joint project combining business process transformation together with technology upgrade. User adoption is the key to success. If you want maximize the return on investment and develop the complete potential of your new ERP, you must engage your people. You must not fear to evaluate and implement process changes as the technology allows you to empower your people in different areas than before.
What are the key recommendations for a successful ERP strategy?
- Understand the process and look for any potential improvements that will make it simpler, leaner and more efficient. Combining new technology with an old process only becomes a very expensive old process.
- Involve diverse stakeholders that will challenge the process and create new ways of doing things. Remember that you are designing the processes of the future.
- Don’t underestimate change management. Make the ERP transformation the highest priority in your company. Inform, communicate and engage your stakeholders. Help your people understand what’s in it for them and encourage them to develop new skills.