At a glance
An ERP project is considered a failure if the objectives, budget or timeframe are clearly missed. This is typically due to unrealistic planning, unclear targets, an unsuitable project team, a lack of support from management or a lack of transparency towards employees. The consequences range from inefficient processes and resource commitment to competitive disadvantages. The decisive factor is: Early crisis management is the only way to get the project back on track.
Anyone looking for reports on ERP implementations will soon come across horror stories about failed ERP projects. There is talk of massive budget overruns and of system implementations that were canceled years later with no results.
But don’t panic: An ERP project is not doomed from one day to the next. Serious problems are always the result of mistakes that are avoidable. With good preparation, you can reduce the risks to a minimum.
It’s best to start by looking at the causes that cause an ERP project to fail. We will then show you how you can get a project that has run aground back on track with the right crisis management.
Why ERP projects often go wrong
Unrealistic time and cost estimates
Project managers often underestimate the internal capacities and costs required. The fact is that the project team average invest at least half of their working time in the ERP implementation. If you do not take these blocked resources into account, your project planning will quickly become unbalanced.
Unclear goals and targets
An ERP system will only generate the desired added value today and in the future if it reflects the business strategy. If you neglect the precise definition of objectives at the start of the ERP project, the company’s needs may not be sufficiently taken into account during development.
Incorrect composition of the project team
It sounds paradoxical, but many companies do not choose the most suitable project managers and key users out. They fear that the manpower of these top performers could be lost in day-to-day business. However, if you fill these positions with people who are not competent, there is a risk of conflicts and wrong decisions.
Lack of support from the management
If management does not fully support the ERP implementation and the project team, this weakens the position of the project managers. The result: colleagues question decisions and prioritize day-to-day business higher. This creates frictional losses that unnecessarily prolong the project.
Lack of transparency towards employees
If the ERP implementation only takes place behind closed doors, some employees do not feel that they are being listened to. They do not recognize the added value of the project and make up for the lack of information through the grapevine. As a result, negative rumors spread very quickly, fueling fear and resistance.
Rejection and resistance: the hurdle of user acceptance
Many companies think that technical or planning problems are the biggest challenges of an ERP project. In reality, however, people represent a far greater risk factor. The area of user acceptance is particularly critical: if your employees reject the ERP system, even the best software cannot generate any added value.
In such a case, you can only take targeted countermeasures if you know the causes. So let’s take a look at the reasons for resistance to the new ERP system.
In the beginning there is fear
Modern ERP software maps the process and specialist knowledge of employees. It standardizes many workflows and suddenly brings to light processes and key figures that previously remained hidden. This newly created transparency ensures that optimization potential becomes clear.
From the management’s point of view, this is certainly a positive development. From the perspective of some employees, however, the picture is different: they fear that transparency will make their position superfluous and that standardization will jeopardize their uniqueness.
Mistrust and denial follow
Once the feeling of replaceability has taken root in the minds of the workforce, a negative momentum threatens to develop. Some employees do not want to disclose their knowledge in order to secure their position and reduce the success of the ERP project.
This kind of behavior damages the working atmosphere. If all employees keep their experiences to themselves, subliminal power struggles brew. These culminate in tensions and conflicts that make it difficult to work together efficiently.
If your employees reject the ERP system, even the best software cannot generate any added value.
How to gain the acceptance of your employees
Enough pessimism. As an ERP decision-maker, you can do a lot to
Create an open corporate culture
Ideally, an active exchange of information is a matter of course for your workforce. Transparency is then no longer a scary foreign word, but a lived reality.
Get all employees on board at an early stage
By keeping the entire company regularly informed about the project, you automatically take the fear out of the ERP implementation. Explain to your team why you are relying on an ERP solution and
Name the advantages of the ERP solution
The fact that an ERP system facilitates work processes in day-to-day operations should be of great interest to your staff. Make sure you talk about this
Take your employees’ fears seriously
Ignoring the resistance of the workforce is not a good idea. It is better to listen to their fears and concerns and address them with empathy. This will create an atmosphere of trust and prevent concerns.
More on change management: How much change is acceptable?
If the project still threatens to run aground: what you can do
If you realize that your ERP project is on the brink, clever crisis management can help. The following applies: Keep calm. Do not make any decisions without carefully analyzing the situation. Short-circuit reactions can be expensive in the long run.
1. involve the system provider
The first step is to discuss the situation with the ERP provider. Make it clear to your
2. carry out an error analysis
Tracking down errors in an ERP project is often not that easy. The interplay between cause and effect is simply too complex. Delays can be the result of poor change management, for example: The project team does a good job, but the rest of the company rejects the ERP system. You should therefore take a thorough approach to error analysis and look at the entire project together with those involved.
3. evaluate the prospects of success
First compare the planned with the actual course of the project: How big is the deviation? And what would the chances of success look like if you were to overcome the crisis? In most cases, solid crisis management can get an ERP project back on track. Sometimes, however, the acute problem is just a symptom of a much deeper-seated process weakness. In such a case, no short-term countermeasures will work – you have to tackle the underlying problem first.
4. review the project team
If intense resistance arises that jeopardizes the success of the ERP project, the fault often lies with the project team. You should question the project management in particular at this point: if they are not doing a good job, the other team members will not be able to fully exploit their potential.
5 Communicate openly about the crisis
Even in a crisis, transparency is the top priority. Don’t make the mistake of keeping the ERP project’s difficulties a secret for too long. Instead, go on the offensive: communicate honestly about the current state of affairs and the challenges the ERP project is facing. It is important that you
6. develop countermeasures
Exactly what the countermeasures look like depends on the results of your root cause analysis. Does part of your team feel that they are not being listened to sufficiently? Then you should improve communication, for example with an ERP newsletter or an internal wiki. Or are internal power struggles the reason for the problems? Then identify the troublemakers and seek a discussion.
7. compare all options
As soon as the necessary measures have been determined, you make a monetary assessment and carry out a cost-benefit analysis. On one side of the calculation are the planned measures. On the other side are the costs of the previous ERP implementation, the reversal and any consequential damage caused by unresolved weaknesses in the organization. You can then determine whether it is worth continuing with the project.
8. make a decision
The next step is to choose and implement a strategy. If you want to continue the ERP project, carry out your planned measures. You eliminate all sources of error and get your project team back on track. If you decide to terminate the project, you need to organize the reversal.
9. rebuild project-related processes
If you restart the project, the core processes of the ERP implementation are the first priority. such as implementation and functional tests. However, project-related processes such as risk management, quality management, monitoring and reporting should also be restarted slowly. On the one hand, this will allow you to regain
10. carry out a final analysis
Your intervention concludes with a detailed analysis of the course of the project to date – before and after the crisis. The focus here is on two questions:
- How did resistance arise within the workforce?
- What did you do about the rejection?
The point of all this is by no means just documentation – you are looking at the big picture. Has your staff’s attitude of rejection really disappeared or have you merely treated the symptoms? Try to learn from your mistakes and adapt the rest of the project accordingly.
Conclusion
Nobody likes to deal with the possibility that the ERP implementation could fail. However, burying your head in the sand is counterproductive: if you leave the workforce to their own devices with their worries, resistance will develop, causing delays and additional costs.
However, if you are prepared for the most common worst-case scenarios, you can calm the waves with confidence and save your project from capsizing with well thought-out crisis management. By making the right decisions, you are very likely to bring your ERP project to a safe harbor.
