Why Do ERP implementations fail?
Many of the ERP implementations fail & management not able to understand the reasons. The same ERPs give very high ROI in one company, but it may fail to reproduce the results in another in the same industry. What can be the reason?
A study was conducted in India on failure of ERP implementations. The three main reasons spotted in the study are
• Client unable to perceive potentials of an ERP package: The clients perceive ERP as just another software development tool. They try to change ERP as per their current practice, instead of a readymade management tool with best practices incorporated.
• Perceiving ERP as cost & not as 'Investment'. As ERP is regarded as cost, the clients try to minimize the implementation cost by choosing Implementation partner having lowest quotation. There are many small players in India, employing fresh consultants. A team with almost all fresh consultants can not deliver expected results.
• Clients fail to perceive ERP as on-going activity. The clients (specially in India) is growing very fast every year, but implemented ERP system is the same, giving mismatch between the added needs and capability of implemented system. The client should modify the system continuously as per the changing needs of the business.
