5 Reasons International ERP Deployments Fail
A successful international ERP implementation is transformative for a company. Large gains in productivity, better reporting, and the adoption of best practices globally all have a significant positive impact on the bottom-line.
Unfortunately, the opposite is also true. We’ve all heard the horror stories of international ERP projects that have failed and the terrible consequences that follow. A failed global ERP rollout can not only have a huge financial cost, but can also be destructive for staff morale.
5 Reasons International ERP Projects Fail:
1. Underestimating the Challenge
Without wishing to state the obvious, an international ERP project is a big, extremely complex, time-consuming project. Do not treat an international ERP implementation like “just another” IT project. The international dimension really does add a layer of complexity and risk. Underestimating the impact of language and cultural differences and the challenges of communicating across different time-zones can be fatal.
2. Insufficient Resource Allocation – This is your day Job
The success of an international ERP project is critical for your business. So just like any really important project, you’ll need to ensure your best team members are working on it. However, if you want the project to succeed, you need to realize that getting this project over the line is a full-time job. Don’t make the mistake of thinking your best team members will be able to do their “day job” and be a fully committed member of the international ERP project team. If you don’t allocate resources judiciously, you not only risk some of your best people getting burnt out, you will also put the project at risk.
Similarly, the project needs strong sponsorship. Over the course of the project, there will be a lot of difficult decisions to be made and without strong Snr. Management support and commitment, project managers may avoid or delay making the difficult decisions and be reticent in their communications. This scenario can obviously have disastrous consequences.
3. Poor Methodology – Avoid Scope Creep but Be Flexible
You will need a strong Core Model and a well-documented implementation methodology if you want your ERP global project to succeed. Two causes of global ERP project failure are scope creep and having a Core Model that is too rigid. Clearly, these are two sides of the same coin. You have to find just the right balance to avoid Scope Creep while being flexible enough to adapt to the realities of the project.
To get this balance right you need to be clear on the “rules of the game”. Be clear on how much flexibility your Core Model can have, how it is managed, who has the final decision on when and how it should be changed. How much local input will there be? What can be adjusted for local requirements? What is not negotiable? What are the communication processes? You need to define and clearly communicate on all these points in advance. This will help you to set expectations at an early stage.
4. Choosing the Wrong ERP – Don’t believe the Hype
Despite what some ERP vendors claim, not all ERPs are created equal. When it comes to international ERP, it is even more important to choose your ERP wisely and to consider future growth. Questions you will need to ask include:
- Will your ERP be able to scale and grow with your company?
- Can you ERP handle multi-currency, multi-company operations and take into account multiple tax regimes and legal requirements?
- Will you be able to find experienced consulting resources with both product and industry knowledge in all the countries where you wish to deploy the solutions?
5. Choosing the wrong ERP Implementation Partner
A successful international ERP implementation requires consultants to have a very specific skillset. They need to know how to define and manage a Core Model and be able to effectively navigate local business and corporate culture. A really good ERP consultant who has only ever worked in a domestic environment will not necessarily have the required skills.To ensure international ERP rollout success you need to work with a partner who has years of experience of international rollouts and many happy and successful clients.
You also need to like your partner on a global ERP rollout. This is not an insignificant point. Remember, global ERP projects are not completed in a number of weeks, you’ll be working with these people over many months, so when choosing your implementation partner ensure that there is a good cultural fit between your organization and your ERP consulting partner.
Rolling out an ERP internationally is a big, ambitious and exciting project to work on. We've worked on international ERP projects with both large multinationals and ambitious mid-sized companies taking their first steps towards internationalization. Every project has its own individual challenges and we've learned a lot of lessons along the way.
Stay tuned to our blog where our consultants will share with you lots of tips on how to help your company grow and develop internationally by successfully implementing a global ERP solution.
Please don't hesitate to contact us if you would like to discuss your International ERP project plan with one of our experienced consultants.
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