What are The Most Common Causes of ERP Failure
ERP stands for Enterprise resource planning which is one of the widely used application software across the companies to expand their business. The implementation of this software plays a vital role in success or failure of the software in the organization. ERP implementation can be failed when the software does not provide the features it promised. Apart from this the most common causes which lead to unsuccessful implementation enterprise resource planning in a business are discussed below:-
1. Time and cost are two major causes for the failure of ERP and it has been found in the survey that about more than 50% of the projects take longer time than expected and cost also goes beyond the expected budgets in the half of the projects.
2. If the new system is not able to provide an integrated solution to the old applications, it can result in the failure of ERP implementation which is not accepted by the user.
3. The lack of frequent communication can cause the failure of project and therefore it is important for the vendor to stay in touch with team members, hold regular meetings with the top management and also meet the end users to get successful results. Around 50% of the projects suffer from the delays caused by lack of communication which is signified as failure of ERP.
4. Only experienced and most qualified executives should given the responsibility of working on software ERP because it is very tough for the normal person, as there are lots of further divisions of ERP which can ne confusing for an individual to operate. Presently it is noticed as the most common cause of the failure of ERP because inexperienced person can do a lot of mistakes which cal lead to huge losses.
5. ERP failure can also be caused by the inadequate analysis of requirements and planning before the start of project. Poor planning may lead to poor sections of package, which may not satisfy the company needs.
6. Lack of appropriate knowledge of ERP in advanced versions and new customization methods can be seen when ERP is operated by untrained performers, though having knowledge of this software. So Adequate training to work on this software must be provided by experienced CA only.
7. Automated system of ERP requires a number of changes in the business management on regular basis, whereas half of the companies find it difficult to manage changes in their routine business procedures, this leading to ERP failure again.