What Defines a Successful ERP Implementation?
After 15 years of research on business digital transformation, McKinsey reported that less than one-third of of surveyed businesses succeeded in digital transformation, along with the observation, "Yet success remains the exception, not the rule."
Viindoo strongly agrees with McKinsey's statement. Digital transformation, particularly the application of technology like ERP, is incredibly complex and far from easy. Failure is entirely possible without the right methodology and realistic expectations.
At Viindoo, we define a successful project as one that is "On Budget, On Time."
Why Budget and Time?
The goal of ERP implementation is to help businesses apply technology to their management processes as soon as possible, allowing them to see the benefits that the system brings. In the context of fierce competition and rapid market changes, timely technology adoption creates an advantage, enabling businesses to seize growth opportunities.
To achieve this goal, it’s essential to remember that time and budget are finite resources. Any factors that extend timelines or exceed budgets can lead to unnecessary losses, diminishing the overall effectiveness of the project. Other factors, while important, are always secondary to ensuring the project stays on budget and on schedule, as these are the keys to achieving sustainable success for the business.
What Prevents ERP Implementation from Succeeding?
You may find lists of ERP implementation risks elsewhere: lack of executive involvement, poor project management, user resistance, unrealistic expectations, and so on.
Viindoo does not deny these. However, in the context of this article, sharing our ERP implementation experiences, I want to focus on practical insights and specific issues encountered during the numerous ERP projects we have worked on, illustrated through a few stories:
Story #1: "I want... Let's develop a new feature."
This is perhaps the most common situation we encounter in almost every ERP implementation project. During surveys, consultations, training sessions, etc., users often request the development of unique features tailored to their specific operations. These features are expected to address their issues: automating this process, providing that form, integrating data from the old system, etc.
It sounds reasonable because businesses believe that these new features will bring them more operational benefits. However, it’s not just about adding a feature. In reality, developing new features mid-project not only leads to cost overruns and project delays but also introduces many unforeseen risks.
One of the most concerning consequences is the accumulation of technical debt. Businesses may have to pay off these debts in the following years in the form of maintenance costs, upgrades, and dealing with issues arising from those new features. These costs can increase over time, reducing the economic efficiency of the initial ERP project.
Developing new features mid-project not only leads to cost overruns and project delays but also introduces many unforeseen risks.
Story #2: "I want... Why are you rejecting this request?"
During an ERP project, we encountered a situation where a client requested the integration of an old software system they had been using for a long time into the new ERP system. For them, this was very important and met their current needs.
Even though we understood that this request could complicate the system, create incompatibility, and lead to maintenance difficulties, we still faced strong opposition from the client when rejecting this request. They felt ignored and unheard.
A very clear truth is that expectations and satisfaction standards will change over time. What is deemed necessary today may become outdated or irrelevant in the future. Each stakeholder, from leadership to end-users, has different expectations, which can lead to inconsistent requirements, making project management challenging.
As implementation consultants, we don't overlook customer satisfaction, but we always strive to balance and prioritize ensuring the project's success—meaning on time and on budget.
Satisfaction changes by time
Story #3: "Let’s add these additional parts; I will pay extra."
The final story I want to share concerns a customer’s request right before go-live. They proposed expanding the project scope by adding more features and modules. They were willing to allocate extra budget to meet these demands, with the expectation that the project would deliver even more value to the business.
It sounds appealing, but in reality, expanding the project scope before go-live is not just a financial issue. When the project scope is expanded, more resources—financial, human, equipment, and time—will be needed. This often leads to project delays, far exceeding the original plan.
This delay also puts pressure on the business and the project team. As the project drags on, feelings of fatigue start to set in. The excitement and confidence in the project's success gradually fade, replaced by concerns about whether the project can be completed as promised.
These negative emotions can demoralize the team, leading to delays and unnecessary errors. Rather than delivering better results, scope expansion sometimes causes the project to spiral out of control and fail to achieve its intended goals.
Same story: Users requested trees planted before the building was complete, resulting a full-of-tree and unusable building in the end.
So, What ultimately prevents ERP implementation from succeeding?
There is no absolutely correct answer. The only constant is the top priority: "getting the business to apply the software as early as possible, ensuring the project is completed on time and on budget." Viindoo will take all necessary measures to realize these priorities, ensuring the successful implementation of ERP for businesses.
How Does Viindoo Ensure ERP Project Success?
In the journey of ERP implementation, countless factors and unforeseen challenges arise. Each business presents a unique challenge, despite similarities in industry, products, scale, leadership generation, etc. Therefore, there is no one-size-fits-all success formula.
At Viindoo, we choose to build the right methods and set correct expectations for ERP implementation projects.
Setting the Right Expectations. Always Adhering to the Established Goals
Viindoo’s top priority in every ERP implementation project is to ensure it is on time and on budget. This means we will address any issue that may pose a risk to these goals.
When facing change requests from customers, such as adding new features, integrating additional systems, or altering software workflows, we ask critical questions:
- Is this request truly necessary?
- If implemented, is it worth the cost?
- Will developing the new feature bring enough desired benefits?
- Can we approach it differently while still achieving the goal?
This ensures that every decision is carefully considered, and only changes with real value are made. Through this process, we maintain focus on the set goals and safeguard the project's sustainable success.
Implementation Methods to Realize the Goals
Prioritize horizontal feature implementation
We focus on implementing synchronized features from input to output to ensure that businesses have a comprehensive and complete system right from the start. This approach helps reduce the burden of data entry and optimize workflow processes. By keeping the system simple and easy to operate, we help businesses quickly start using the new technology without unnecessary complications.
Go-live as soon as possible
Go-Live as soon as possible with fewer but high-value features
We prioritize going live early with fewer features but ones that deliver high value. Instead of waiting until all features are complete, we encourage implementing core features first so businesses can immediately start benefiting from the ERP system. This not only allows businesses to leverage the system's benefits sooner but also enables them to make necessary adjustments and improvements flexibly.
Determining Priorities Based on Value
To identify high-value features, we conduct ROI (Return on Investment) analysis for large and complex projects. This analysis provides businesses with a comprehensive view of the requirements, investment costs, and value brought. This allows businesses to assess ROI on the investment costs for specific features and requirements. We also thoroughly review and reassess requests, addressing doubts and making the project’s feasibility transparent to all project members.
Peer Review
In addition, we organize peer review meetings with Viindoo experts—those who are not directly involved in the project. These experts provide objective insights and critique proposed solutions, ensuring that decisions are reasonable and genuinely valuable.
And many other factors; please refer to our detailed content:
Conclusion
To successfully implement ERP, businesses must remain steadfast in completing the project on budget and on time while being ready to eliminate unnecessary elements. Experience has shown that success does not come from satisfying all requests or expanding the scope uncontrollably. Instead, businesses need to focus on core objectives, tightly manage limited resources like time and budget, and control factors that could distract from the project’s main goals.
Success in ERP implementation requires seamless coordination among stakeholders and a strong commitment to the agreed-upon direction. Only when businesses clearly understand and persist with key priorities and are willing to sacrifice unnecessary elements can the project achieve the best results, delivering long-term and sustainable value to the organization.
How to Successfully Implement ERP?
There is no correct answer for a successful project; but once the project is successful, every answer becomes correct.
Implementation & Consultancy Service
Consulting, orienting the implementation, training on using Viindoo Software to manage your Business.
FAQs
Success in ERP implementation requires careful planning, commitment from involved departments, thorough user training, and support from the ERP provider. Understanding business needs is also crucial.
The duration of ERP implementation can vary depending on the project's size and complexity, but typically it can range from several months to several years.
Yes, ERP implementation often involves optimizing the business's workflows to ensure system effectiveness and accuracy.
The success of an ERP project can be measured in various ways, including: improving work efficiency, reducing operational costs, enhancing customer satisfaction, improving workflows, and enhancing integration across the organization.
ERP implementation can be costly in terms of both expenses and time. However, if successfully implemented, it will bring many benefits and cost savings in the long run.
