There can be many reasons for the failure of implementing ERP software. The reasons can change from company to company. If we look at only those instances of companies which have purchased ERP software from a vendor, some significant observations can be made.
The common reason for failure is a poorly developed ERP software. In this case, the company cannot be blamed for the failure of software implementation. In case, the software is working well, and even then the implementation has failed, the reason can be the need for an elaborate customization requirement.
When customization process is long drawn it means longer time duration to get the ERP software operational and additional costs. Customization can also lead to more buggy software resulting in uncertain implementations.
These are the two most common reasons for the failure of software implementation.
After this, the most common reason is the company is unable to get even the beta version of the ERP software operational, resulting in employee de-motivation, the end result being failure of the ERP software.
Large companies with the requisite financial muscle have developed a strategy to ensure that customization is minimal thus leading to more successful implementation and resulting in a better track record for the company.
The flip side of this is that there can be features incorporated in the software which may not be required by many companies leading to bloated software requiring larger IT infrastructure pushing up the overall costs.
Due to the constantly changing business processes of a company, ERP software developers associated with upgrading the software to accommodate the changing business processes have a challenging task.
On one hand they have to program the software to meet the new and changed business processes and on the other hand they have to grapple with a constantly evolving set of software tools and new methodologies.
May a times, ERP software forces the company employees to accept new data recording procedures and alter their working to introduce new business processes. This results in the necessity of the employees to undergo training and learn the new processes and user interfaces. This can also contribute for ERP software failures.
- Lack of internal expertise
- Lack of communication among staff and management
- Lack of a champion
- Lack of appropriate hardware suitable for ERP software
- Bad working culture with no respect to recording of data
- Financial crisis in the company
- Downturn in sales resulting in company shifting focus from ERP implementation