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13 common ERP mistakes and how to avoid making them

Jennifer Lonoff Schiff | March 28, 2012
Implementing an ERP system is among the most expensive, time-consuming and complicated tasks an IT department can take on. The potential for delays and unexpected expenses lurk around every corner. To help you avoid costly mistakes, CIO.com asked IT executives, ERP vendors and technology consultants to provide advice on how to avoid becoming an ERP horror story.

ERP Mistake #8: Underestimating the importance of accurate data. Your ERP system is only as good as the data that is in it. So, if you want your ERP implementation to succeed, "it is imperative that proper programming and procedural parameters are put in place [right from the start] to minimize the likelihood of errors," argues Martin Levesque, director of Professional Services, iDatix , a document management and workflow solutions provider.

ERP Mistake #9: Taking the kitchen sink approach."No matter how powerful or flexible an ERP system is, it will not be able to absorb all business logic," explains Akan Iza, software architect, NetFoliage, a website development firm. "One of the most common mistakes made during ERP implementations is to assume that ERP can be used to run a business end to end," he points out. "To avoid this costly mistake, companies should focus on implementing ERP to optimize value chain and to trace costs. Everything else should be a secondary goal."

ERP Mistake #10: Not decommissioning legacy applications. "If [organizations] do not actively work to decommission applications during the implementation, the end result is an ERP with all of the original legacy applications hanging off of it," argues John Picciotto, principal, Application Modernization & Optimization at Accenture . "The end result is another piece of software that [you] are paying maintenance and support on, paying for hardware and upgrades, and paying for interfaces back into the core ERP," when the point of getting an ERP system was to streamline workflow and reduce costs and waste.

ERP Mistake #11: Not having an active load testing environment . "You won't be able to see the true results of your changes based on a couple of test users," points out Herrig. "You must be able to simulate your user load in order to see the real-world effects of changes and avoid costly unplanned downtime."

ERP Mistake #12: Ignoring third-party support alternatives. "Many companies insist on premium vendor support, despite the fact that maintenance rates are at an all-time high and they can get the same level of service from a third-party support provider," says Jon Winsett, CEO of NPI, an IT spend management consultancy that works with Fortune 1000 enterprises. "Companies should explore all options for support, ranging from hybrid support providers that work directly with their vendor to deliver service, as well as providers that work independent of their vendor's partner program," he says. "A third-party support alternative can easily reduce support costs by 30 to 50 percent."

ERP Mistake #13: Not having a maintenance strategy. "Customers not conducting preventative maintenance are not taking full advantage of their ERP investment and their maintenance dollars," states Marco Valencia, vice president, Upgrade Office, North America & Latin America, SAP America, Inc. "By not applying maintenance, their systems will quickly become obsolete (from a technical perspective) as will their business processes." Moreover, he says, it is important to "keep the kernel up-to-date, with the right legal changes applied to prevent potential problems," and with improvements in installation technology, customers now experience only limited disruption when implementing support packs.

 

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