Common Mistakes to Avoid When Recovering from ERP System Implementation Failures

Enterprise resource planning (ERP) systems centralize disparate processes and increase efficiency, but when an ERP project stalls, all those benefits are also put on hold. Recovering a failing ERP software implementation is challenging but has to be done in order to recover your initial implementation costs and gain the advantages of the new ERP software.

There are many reasons that lead to a troubled or failed ERP implementation process including poor planning, scope creep, lack of resources, insufficient change management, or data migration issues. Successfully turning it around requires strategic, comprehensive planning and avoiding the common pitfalls that lead to further delays or even a total project failure. This blog will explore a few of the most common mistakes encountered during a ERP project recovery along with some tips for avoiding them.

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Understanding ERP Implementation Failure

An unsuccessful ERP implementation can be a costly and time-consuming experience for any company. It’s important to take the time to understand what went wrong and create a well thought out recovery plan before starting the reset process. By recognizing the challenges and preparing your strategy to overcome them, your business can navigate ERP system complexity effectively.

Why ERP Implementations Fail

ERP implementation failure can be traced to a number of factors, including:

Inadequate Planning and Project Management: Without a well-defined plan and effective project management, ERP implementations can quickly go off track.
Lack of Clear Goals and Objectives: What’s the point of this project? Be sure to outline clear goals for your new ERP system to avoid misaligned efforts and wasted resources.
Insufficient Training and Support for End-Users: If users are not adequately trained, they may struggle to use the new system effectively, leading to low adoption rates.
Inadequate Testing and Quality Assurance: Skipping or rushing through testing phases can result in undetected issues that disrupt your everyday business processes.
Unrealistic Expectations and Timelines: Overly ambitious timelines and expectations can put pressure on the implementation team, leading to mistakes and oversights.
Ineffective Change Management and Communication: Failing to manage change and communicate effectively can result in resistance from employees and stakeholders.
Inadequate Resources and Budget: Underestimating the resources and budget required can lead to project delays and compromises in quality.
Lack of Leadership Commitment and Support: Without strong leadership and commitment from upper management, the project may lack direction and lose momentum.
Flawed Data Migration and Integration: Poorly executed migration of your existing data and integration of legacy systems can lead to data inconsistencies and operational disruptions.
Poor Security and Access Controls: Neglecting security measures can expose the organization to data breaches and compliance issues.

Understanding these common causes of ERP implementation failure can help companies take steps to mitigate risks and increase the likelihood of a successful implementation.

"Costly and complex to resolve, ERP derailments occur when businesses fail to address the many potential risks that can present themselves during system implementation."

Lisa Schwartz | Netsuite

ERP Implementation Failure: 8 Recovery Mistakes

As the saying goes, “Even the best laid plans…”. Your carefully developed project plans might not result in a successful ERP implementation. If you find your implementation process has stalled and you need to begin a recovery plan, here are some common mistakes to avoid when getting your ERP project back on track.

1. Failing to Diagnose the Root Cause of the Problem

It’s not uncommon for project managers to focus solely on fixing symptoms without addressing the underlying problem. But the first step in any project recovery is understanding the root cause of the issues.

For example, if a project is behind schedule, the team might simply increase working hours without understanding whether the delays are caused by unclear requirements, unrealistic expectations, poor communication, or technical challenges. Without addressing the root cause, the recovery efforts will be shallow, and the project may continue to struggle.

How to Avoid This Mistake
To avoid this mistake, take the time to conduct a thorough root cause analysis. Use techniques like the “5 Whys” or Fishbone Diagrams (Ishikawa) to identify the problems. Ask your key stakeholders and team members for feedback to gather their perspectives on where things went wrong. Be sure to consider not only technical aspects but also project management processes and communication plans.

2. Overlooking the Importance of Clear Communication

One of the most common mistakes in ERP implementation project recovery is assuming everyone involved is on the same page without verifying it. Clear communication is a must-have during ERP implementation projects. Without it, misunderstandings and team frustration can lead to delays and mistakes, further destabilizing your already struggling project.

How to Avoid This Mistake
Ensure frequent communication that’s inclusive of all stakeholders. Hold regular team meetings to discuss progress, obstacles, and any project changes. Update the team on developments and involve them in decisions that might affect the project’s course. Use collaborative tools to keep everyone aligned and allow for real-time updates. The more involved your team feels, the more likely they are to support recovery efforts.

3. Neglecting to Reassess Project Scope and Goals

One of the most significant issues when trying to recover a failing software project is scope creep. During the recovery process, it can be tempting to add features or try to meet all original requirements in an attempt to “save” the project. But this can result in delays and additional strain on the team. Trying to stick to the original scope, even after it’s clear that the project is struggling, can overwhelm the recovery process.

How to Avoid This Mistake
Reassess the project scope by collaborating with stakeholders to determine the most essential ERP functionality and features. Consider prioritizing features based on business value and user needs. Be willing to cut non-essential features or defer them to a later phase. By focusing on the most vital deliverables of the project, you can create a recovery plan that is more manageable and realistic.

4. Overloading the Team with Work

When a project is delayed, managers may feel the pressure to increase the team’s workload as a way to “catch up”. But overloading the team can backfire, leading to burnout and errors.

How to Avoid This Mistake
Work smarter, not harder. Instead of increasing the workload, focus on improving efficiency. Conduct a assessment of the project and identify areas where bottlenecks are occurring. Consider breaking the project into smaller, more manageable tasks with realistic deadlines. Hold regular check-ins to ensure the team is on track.

5. Ignoring Technical Debt

In many cases, a failing software project accumulates technical debt. This happens when shortcuts are taken such as skipping tests or rushing through development. While this may seem like an acceptable trade-off when time is tight, these shortcuts compound over time and cause more significant problems down the line. During a project recovery, there is often pressure to “move quickly” to deliver results, which can lead to further technical debt accumulation.

How to Avoid This Mistake
Ignoring technical debt during the recovery process will only delay the project’s successful completion. Poor ERP processes can lead to issues after go-live is complete, including financial losses and operational inefficiencies. While it may seem tempting to defer addressing technical issues, technical debt can lead to long-term problems that affect stability and maintainability of your ERP solution. Recovery isn’t just about getting the project back on track but also ensuring that the project delivers results in the long-term.

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6. Lack of Stakeholder Involvement and Buy-In

Implementing ERP is a major undertaking for any company, impacting all areas of the business. It’s key to have buy-in and involvement across the organization from the start, and it’s especially important during the recovery process. Stakeholders may include management, department heads, or end-users, and their buy-in is crucial for successful project recovery. Without their support, the recovery plan might fail to align with business needs, leading to frustration and lack of commitment from the team.

How to Avoid This Mistake
Establish clear communication channels with stakeholders from the outset of the recovery process. Regularly update them on progress and involve them in critical decision-making, especially in the case of scope adjustments, deadlines, and priorities. Engage them in discussions around the project’s long-term vision and system requirements, ensuring the recovery plan aligns with business goals.

7. Failing to Adapt to Changing Circumstances

ERP implementations rarely unfold exactly as planned and an ERP project reset is no different. During the recovery phase, flexibility and adaptability are critical. Recovery isn’t a one-size-fits-all process, and the plan needs to be able to adapt to unforeseen challenges. Rigidly sticking to an initial recovery plan without considering new factors may stand in the way of your ability to adjust effectively.

How to Avoid This Mistake
Regularly reassess the project and its environment. Be proactive in identifying potential risks and remain open to changing course when necessary. Use agile methodologies to embrace change and incorporate feedback quickly, ensuring that the recovery plan is flexible and adaptable to any new information that arises.

8. Ignoring Quality Assurance and Testing

As ERP implementations start to fall behind schedule, testing is often one area to be neglected in an effort to speed the project’s completion. But skipping tests or quality assurance (QA) can lead to more problems later on. Uncaught bugs and integration issues could lead to further delays and effect the long-term success of the new system.

How to Avoid This Mistake
Don’t skip quality assurance and testing during the project recovery. Prioritize testing critical components and functionalities and address any issues immediately to prevent them from becoming bigger problems down the road.

Conclusion

Recovering an ERP project requires careful planning, a clear understanding of the core issues, and a collaborative approach. By avoiding the mistakes outlined in this blog, project managers can increase their chances of successfully recovering a troubled project.

Do you need some guidance getting your ERP project back on track? Ultra’s experienced ERP consultants can address critical issues and ensure long-term success with your ERP software. Get started by scheduling your free discovery call today.