Erp Implementation

Erp Implementation Risks

Avoiding ERP Implementation Risks

Erp Implementation Risks

Whilst companies can recognize business process improvement and quantify the effect ERP software has on the bottom line, it is important to be aware of some common ERP implementation risks to avoid project derailment and budgetary blowout. These must be addresses upfront in the project implementation plan to avoid sabotaging the project.

First of all, you must be aware that one of the most important erp implementation risks that often gets overlooked is the total cost of ownership of the ERP solution. This includes hardware, software and training costs. Historical studies indicate that software is only a small component of the total project outlay. Therefore, it is important that a company identify the cost of the project over the full implementation lifecycle.

Erp Implementation Risks

Secondly, you must keep in mind that after implementation, clear division of responsibility needs to be assigned. This will keep all parties informed about system processes. Automated tasks take the place of previous manual requirements. System backups or archiving needs to be properly assigned for security purposes. Thirdly, an ERP application risk is that workers are not properly trained to derive the full benefits of the ERP functionality. This compromises productivity and increases costs. If staff do not know how to use the software then it runs the risk of becoming nothing more than an expensive calculator. Different staff have different information requirements, the training needs to address this and staged training must be allowed for in the project plan.

Fourthly, adequate security protocols need to be put in place. This is to protect the data integrity internally by assigning user data access rights and externally by ensuring data exposed to internet access is adequately protected. Proper firewalls and testing needs to take lace to make sure any applications are not exposed to external hack threats.

Fifthly, system dependencies need to be adequately tested prior to the software going live. If staged modules are used, sandbox testing using the development team and simulated real life data testing can help identify any bugs in system processes. Checking for system robustness and usability is essential. Failure to do adequate testing is a significant erp application risk that can compromise the integrity of valuable business data.

A proper project plan can help identify and establish procedures to avoid ERP implementation risks. It is essential that the company properly adopt a project management framework and take precautions to establish best practice procedures. This will assist with bringing the implementation in on time and on budget.

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