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Radically speaking, it is true that nearly around 60% of ERP software implementations fail. One can be safe from such a hazard situation by keeping few of the points in mind at the time of purchase and while selecting the ERP system software for their organizations. There are several reasons why ERP system fails, but let us discuss the top five reasons why ERP systems fail at the stage of implementations. First: Lacking behind in commitment and change in resistance, it is obvious that when any high level management fails in doing a case of change or does not involve itself actively in the process of change. They do not understand the requirements of change, and thus they do not pursue towards change in ERP model. Higher level management appears lack in commitment, and so the below level management in turn appears in lack of commitment. The change is only possible when higher level management delegates and pursue towards change in ERP implementation. Second: Poor package selection and project design, the management should always develop imperative system and must fulfill the functional requirements of the system. Until and unless the management does not require what the actual software should be, they cannot design correct package essential for the business organizations. It is often seen that, management and even resellers at the time of designing project of the software take one or the other short cut so as to decrease the time length of implementation. By doing so, organization can face problems in their daily operations; also when software sufficiently not tested before live implementation. Third: Inadequate time, training and resource, implementation of new ERP system software is time-consuming and requires lot of extensive training. Several organizations do not provide adequate training to their employees. Employees are asked to perform functions normally in their routine and then after provide them training during their overtime hours, due to this employee rapidly burnout and try to grow more and more resistant for change. Due to this technique organization successfully increases the cost of post-implementation, but decreases the anticipated. This will lead to inefficient workarounds behind workflows. Fourth: Miscalculation of effort and time and unrealistic expectations of ROI and benefits, implementation of ERP system is one short of a lengthy process. Employees must be trained, logged inventory, software customized and installed. Implementation process needs time, willingness and dedication to change. The organizations who has implemented ERP system to get answer of their sales and production weakness, will find ERP system failing when they are set to unrealistic expectations and goals. Fifth: Poor communications, communication plays most essential role between ERP developer and organizations who want to implement the ERP software into their system. Best communications will always vital successful implementation of an ERP system. They fails in sharing information of ERP system such as, benefits, importance, affect in system organization, change in processes and policies. ERP system reduces the logistical headaches; it streams the process of order, reduces errors, improves inventory tracking, increases productivity, effectiveness and efficiency, lowers the costs and raises the capacity of volume to achieve greater sales. Read about Causes of ERP Failures. Also know Cost of ERP Implementation. Read about Total Cost of ERP Ownership.
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