ERP Recovery Process: Failed Implementation

ERP Rescue and Recovery: Turning Challenges into Opportunities

ERP implementations are hard work, but they can result in significant organizational value. When executed well, they bring about efficiencies, better support for business processes, and enable employees to act more strategically thanks to automation and AI. Insights emerge organically, streamlining operations and enhancing decision-making. But what happens when things don’t go as planned?

Sometimes, companies emerge from an ERP implementation far from the goals they set out to achieve. In some cases, there’s a longing to return to the old, familiar system. However, what often appears as a failed implementation can be quickly corrected. The common symptom? Angry, frustrated users. The key to a quick recovery lies in diagnosing the root cause swiftly.

Identifying the cause of Struggling ERP Projects 

In our experience at Velosio, ERP projects typically struggle due to one or more of three main problems:

1. Misalignment with Business Processes

Understanding the Gap: Often, ERP systems are not tailored to fit the unique processes of a company. This misalignment can occur when the system’s capabilities don’t match the company’s specific operational needs or when the system’s workflow doesn’t align with existing business processes. 

Customization and Configuration: It’s crucial to ensure that the ERP system is not just a generic solution but is customized and configured to support and enhance the company’s unique business processes. This might involve modifying the ERP system to better fit the company’s workflow or altering business processes to leverage the ERP system’s strengths. 

Strategic Planning: Successful alignment requires thorough planning and understanding of both the ERP system’s capabilities and the company’s operational needs. This should involve stakeholders from various departments to ensure that all critical business processes are adequately supported by the ERP system.

2. Poor Implementation

Quality of Execution: A poor implementation can stem from inadequate project management, lack of expertise, or insufficient resources. This can lead to a system that is unstable, not fully functional, or unable to meet the company’s needs. 

Expertise and Experience: Implementing an ERP system requires a team with the right mix of technical expertise and practical experience. This includes understanding the technical aspects of the ERP software and how it integrates with existing systems, as well as project management skills to keep the implementation on track. 

Testing and Feedback: Regular testing and feedback loops during the implementation phase are crucial. This helps in identifying and addressing issues early, ensuring that the system is robust and meets the company’s requirements before going live.

3. Inadequate User Preparation

Training and Support: One of the key challenges in ERP implementation is ensuring that all users are adequately trained and supported. This involves more than just technical training; it also includes helping users understand how the new system affects their daily tasks and overall business processes. 

Change Management: Effective user preparation involves a comprehensive change management strategy. This includes communicating the benefits of the new system, addressing user concerns, and providing ongoing support to ease the transition. 

User Engagement: Engaging users early in the implementation process and incorporating their feedback can significantly improve adoption. This approach helps in tailoring the system to meet the users’ needs and reduces resistance to change. 

Regardless of the issue, the diagnosis always begins with the user. To effectively address these challenges, we perform a pragmatic ERP User Adoption Assessment. This process is crucial in understanding the depth and nature of the issues faced. 

The Velosio Assessment for ERP Recovery

1. Identifying the Challenge 

Targeted Identification: The process begins with pinpointing the users who are facing the most significant challenges with the ERP system. This identification can be achieved through user feedback mechanisms, performance metrics, and by liaising with department heads or team leaders. 

Diverse User Groups: It’s important to consider a range of users across various roles and departments. This ensures a comprehensive understanding of the challenges as they may vary significantly between different areas of the business. 

Early Detection: Early identification of these challenges is crucial. The sooner a problem is recognized, the quicker and more efficiently it can be addressed, minimizing the impact on the business’s operations. 

2. User Interviews

Detailed Conversations: Once the users facing significant challenges are identified, detailed interviews are conducted. These interviews are designed to understand the specific nature of the users’ problems with the ERP system. 

Structured Yet Flexible Approach: The interview process should be structured to ensure all critical aspects are covered, yet flexible enough to allow users to express concerns that might not be immediately apparent. 

Empathy and Understanding: It’s vital for the interviewers to approach these sessions with empathy. Understanding the users’ perspectives not only helps in pinpointing the issues but also builds trust, making users more open to the subsequent change processes. 

3. Process Evaluation

Collaborative Analysis: This stage involves collaborating with the identified users to evaluate the most problematic processes. This evaluation is not just a technical assessment but also a practical examination of how these processes impact daily operations. 

Firsthand Insight: By working directly with the users, the assessment team gains firsthand insight into the real-world challenges and inefficiencies caused by the ERP system. 

Holistic Perspective: This step aims to get a holistic view of the process – how it’s supposed to work, how it’s currently working, and the discrepancies in between. This involves looking at both the ERP system itself and how it integrates (or fails to integrate) with the existing workflows and business practices. 

This investigation process, with its focus on user-centric challenges, detailed interviews, and collaborative process evaluations, forms the backbone of a successful ERP recovery strategy. By understanding the problems from the users’ perspectives, Velosio is able to diagnose issues more accurately and propose solutions that are both effective and user-friendly, ultimately leading to a more successful and well-adopted ERP system. 

The Diagnosis Phase

Training Evaluation: Were the users well-trained in using the new system? 

Change Management: Was an appropriate change management plan implemented? 

Process and System Alignment: Are the processes and systems well-aligned? 

System Functionality: Does the system work as intended? 

Deferred Components: Were critical components pushed off to a future phase, leaving gaps in the current system? 

A successful ERP implementation hinges on a thorough Diagnosis Phase. This involves ensuring comprehensive user training, evaluating the effectiveness of change management strategies, and checking the alignment between business processes and the ERP system. Additionally, assessing the system’s functionality and addressing any deferred critical components are crucial. This focused diagnostic approach identifies key areas for improvement, setting the foundation for enhanced system adoption and long-term operational success. 

Our Recommendations 

Based on our findings, we suggest a remediation process that tackles challenges related to people, processes, and/or technology. We identify the effort associated with each recommendation and its impact. This enables the company to execute changes swiftly and effectively, righting the ship as quickly as possible. 

Execution Support for ERP Recovery

At Velosio, we don’t just stop at recommendations. We assist companies in executing these recommendations quickly, ensuring the project gets back on track. The ultimate goal is to meet the initial objectives that drove the change, turning what seemed like a setback into a stepping stone for future success. 

Conclusion 

ERP implementations can be complex and challenging, but with the right approach and expertise, even the most troubled projects can be salvaged. By focusing on the users, evaluating the alignment between processes and systems, and addressing training and change management issues, companies can overcome these hurdles. At Velosio, we are committed to turning ERP challenges into opportunities for growth and success

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