8 reasons why ERP

implementations fail in


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 ERP implementation failure can cost your company a lot of money, not to mention time and opportunities for growth.

1 Uncertain vision of the desired ERP system

There is an inconsistency between the company's vision and strategy. Many businesses choose to digitize their processes. However, they lack a clear goal for their implementation. Before you decide to implement ERP, not just Odoo, but any ERP system, you should have clear answers to the following questions:

What is your company's vision?
It is difficult to implement an ERP system in any type of business. Companies' processes are more structured when they have a clear vision. Defining the best vision for your company can assist leaders in making an informed decision about the best ERP system for businesses.

What are your company's plans for the next few years?

Businesses are designed to grow, expand, and generate more profit. There are no businesses in the world that can survive on the market if they do not have a plan for the coming years.

Companies should have a big picture of how they will look in several years before selecting ERP systems.

This information is necessary in order to choose the best ERP system and begin the implementation process. Every organization requires a unique approach, modules, and systems. ERP should assist you in achieving your company's goals and vision, and its structure should reflect this.

Perceiving ERP Implementation as a fixed cost

ERP system implementation should be seen as an investment rather than a cost. If you implement the system correctly and manage change well, it can help you increase your profit and recover your initial investment within months.

A well-managed middle-sized Odoo ERP implementation for a Port Cities client "paid for itself" in less than 4 months. The implementation itself took 6 months and cost $15,000 USD.

Aside from reducing human error, a significant change that was brought to the client was less time spent by the management body on operations. Management gained time to focus on business development and acquiring new clients, which increased their company's monthly revenue.

If you want to invest in an ERP system, make sure to consider all of your options. Low prices do not always imply high service quality, and the same holds true for more expensive solutions. Make certain that you select the right ERP implementation partner, one who has previous experience with implementations in your industry.

Choosing the incorrect ERP consultant
Choosing the right ERP consultant is responsible for 50% of your success.

A good ERP implementation partner analyses and comprehends your business, its process flows and designs a system that meets your company's requirements.

They will walk you through the process, recommend best practices for your industry, and oversee all of the critical factors that will make your implementation a success.

Even though consulting fees from an experienced consultant may be higher, his knowledge can help you save a significant amount of money in the long run.

There are numerous criteria to consider when selecting the right implementation partner, which is why we prepared a separate article on the subject.

All of the work is being delegated to consultants.
Even having the best ERP consultant does not guarantee a successful implementation.

ERP implementation is a two-player game between the ERP consultant and the company. It is a demanding process in which you must communicate frequently, provide feedback, handle internal communication with your employees, and manage change.

There have been numerous cases of ERP implementation failures, even with the best and most experienced consultants, due to a lack of communication on the client's end.

A good consultant will always present you with their methodology and communication risk mitigation plan, and it is strongly advised that clients follow the instructions.

The consultant does not fully comprehend your company's operations.
Understanding your company's processes, vision, and plans is critical to the success of ERP implementation.

ERP systems are designed to help you streamline, simplify, and digitize your business processes.

Every business has unique requirements and requirements that must be met.

The greater the size and complexity of your business, the greater the need for a thorough understanding of it. Choose an ERP consultant who questions you, digs deep, and tries to understand your business. Also, make sure to provide your consultant with as much high-quality information about your processes as possible so that he can design a solution that is tailored to your company's needs.

6. An incorrectly set pricing model for implementation
Choosing a pricing model and payment terms is one of the most common ERP implementation failures.

The two most common models are FIXED BUDGET (the consultant estimates the budget, adds a buffer and delivers the solution) and FLEXIBLE BUDGET (the consultant estimates the budget, adds a buffer, and delivers the solution) (the consultant invoices you the real-time spent on tasks).

Both of these approaches have their advantages in certain situations. Problems typically arise when the client, in collaboration with the consultant, selects the incorrect approach for the project.

Stay tuned for our next article on pricing models to learn how to determine which pricing model is best for your ERP implementation in Vietnam. Port Cities will show you what to be cautious of, how to select the best pricing model for your implementation, and present examples of both correctly and incorrectly chosen implementations.

7. Excessive ERP Customization
The more 
customization you have on your system, the more complex it becomes.

Too many 
customizations can cause problems both during and after implementation. Over-customizing your ERP is often a sign of a reluctance to change and modify current business processes.

When businesses rely on their own processes rather than the software's proven, tried-and-true functionalities, they tend to over-customize.

Not only will the budget be increased, but the company will also miss out on one of the most significant benefits of an ERP system: streamlining business processes.

The best thing you can do with ERP is to make your processes simpler, easier, and faster. It is a tool that can assist you in saving time and resources in an efficient manner.

ERP is more than just converting from paper to a computer; it is also about 
optimizing your business processes. Customization is often a riskier and more expensive solution, but they are sometimes required. Don't over-customize – instead, look for a smart solution that will benefit your business.

We recommend that you read and understand the article The Key to ERP Implementations: Manage Customer Expectations by Fabien Pinckaers, the CEO of Odoo, to learn more about this topic.

8. Inadequate change management and user training 
Having the best and fastest car does not help you travel unless you can drive it.

This is a similar concept to the ERP system.

The ability of employees or users to use the ERP system properly in their day-to-day operations is critical to the success of the ERP system implementation.

The larger your company, the more important it is to properly set the change management strategy to ensure that ERP will provide the expected benefits.

Strategy for Communication
Your company must educate its employees on the importance of a good ERP system in the business.

How will the ERP system help them do their jobs better?

Why is it necessary for your company?

How will using such a system benefit the company?

Understanding "why" will increase your employees' motivation to use it on a regular and proper basis.

Include your employees in the ERP implementation process. Allow them to ask questions and to discuss the new set and updated processes with you.

They can often provide interesting inputs about day-to-day processes because they are the ones who use them on a daily basis. Many businesses do not involve their employees (users) in the implementation process, which often leads to a misunderstanding of the system and a lack of motivation to use it.

User Training

In order to effectively train your employees on how to use the system, it is necessary to define what types of training should be provided and who should attend.

Typically, your ERP consultant will provide a list of ERP training items for your company and ensure you understand how to use the system to reap its benefits.

Before you begin your ERP implementation, make sure to mitigate risks by clearly defining why you need an ERP, how the ERP system should help your business grow, and what internal human resources you will need for the implementation. Make contact with an experienced ERP consultant who can assist you in mitigating the risks of ERP implementation failure.

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