How to Avoid Costly ERP Implementation Mistakes

By June 17, 2014 Blog

How to Avoid Costly ERP Implementation MistakesTaking the step to implement new enterprise software systems can have a number of beneficial effects on your business. As Business Computing World sagely suggests, upgrading to high quality ERP distribution software brings cost savings, increased productivity, and the ability to better see all of the spinning cogs in your business. In other words, ERP software solutions, from inventory control systems to supply chain management systems, are powerful tools for increasing your control over and the success of your business. There is an almost endless list of enterprise software solutions available today but the right partner with the right software can show you how to avoid costly ERP implementation mistakes.

Like many things in the business world, however, the efficacy of ERP programs is limited by the way you choose to implement them. By approaching implementation with a smart, thought out plan, you will find yourself well on your way to a stronger company. Otherwise, you could be on the road to ruin.

Two of the Biggest Enterprise Management Software Implementation Failures

  1. Hershey’s Poor Timing
  2. At the dawn of the new millennium, Hershey’s made the decision to change over to a new ERP program. Unfortunately, because the company went about their plan to implement the system without any foresight, the changeover interrupted their normal business operations, costing them nearly 8% of their stock price in September of that year, as highlighted by CIO. The company chose to implement their ERP solution just as all of their orders for Halloween were trickling into the office, and when the common hiccups of using a new system began to pop up, the company found itself unable to deliver on nearly $100 million worth of product.

  3. New York’s Lack of Discipline
  4. In 2011, New York City saw the failure of a private ERP system built for city employees known as the CityTime payroll system. Over the span of a couple years, the Big Apple saw the budget for the project balloon from $63 million to nearly $760 million. The problem? New York officials didn’t keep a tight enough leash on the development and implementation of the program, leading to rampant corruption scandals involving kickbacks, and the plan for phasing in the new system being largely ignored, as PC World points out. While the city has since recovered $232 million in lost funds, the other half billion is gone.

How Can Businesses Benefit from These Mistakes When Implementing Their ERP Programs?
While the ERP implementation troubles faced by New York City and Hershey’s are unfortunate, the good news is that by keeping these events in mind, you can avoid your company meeting the same fate. What Hershey’s failed to realize is that even the best ERP programs take time to iron out all of the wrinkles. Today, they’ve been vastly improved, but they still can lead to a temporary disruption of your company’s equilibrium. Avoiding the issue is as simple as planning accordingly.

New York’s issues point to a similarly avoidable problem. Only by maintaining strict oversight during implementation of all parts of your company affected can you avoid missing phase-in dates and spending way too much money as the process slows. A little bit of discipline will go a long way toward success.

Has your company struggled with ERP implementation in the past? What advice would you give others?

​​NSA Computer Exchange has been helping distribution companies implement plans and processes to improve business since 1984. If you’re looking for a better way to manage data, streamline efficiencies, boost productivity and grow your profits contact ​​Patrick VanPutte, NSA President. Let our 30 years of experience and expertise in the business accelerate your success.

As a leading business software service organization for distributors, NSA Computer Exchange Corp is ready and available to help you work smarter and grow your distribution company faster, why not find out how we can help? Give us a call at 516.240.6020 or email us at solutions@nsa.yourdmc.com today.