Top Five Reasons for Failure of an ERP Solution in Foundries
We all have talked a lot about large software project failures over the years. There are various types of domain-specific software with substantial failure rates, which mainly include SCM software, CRM software, MRP software, financial management software, etc. Being the largest of all, the Enterprise Resource Planning (ERP) software is not an exception in sometimes failing to deliver on expectations.
In this article, we’ll discuss the five most common reasons for ERP failure, specifically observed in the Indian foundry industry. If you’re planning an ERP implementation for your foundry, then this article is just for you. Use this as a roadmap to understand which potholes should be avoided by you.
Top 5 Reasons for Failure of an ERP Solution in Foundries:
1. Setting unrealistic/impractical expectations:
The idea of digital transformation is certainly exciting. As a result, it's quite easy to become engrossed in the attraction of it. Basically, at the beginning of any large & sparkling new project, foundries have a great deal of excitement over the benefits like — streamlined inventory & production processes, bottom-line savings, sales growth, business intelligence, etc. These all benefits are certainly achievable but the problem comes when such excitements lead to a “hurry-up-and-immediately-get-them-all” approach, without having an idea of what it may take to complete the project.
It is observed that many times foundries are over-aggressive while setting their initial timelines and expectations. Some foundries tend to keep very impractical and unrealistic expectations from an ERP solution, without understanding the level of resource commitment the project may require. Don’t let this be you. Understand what your existing systems currently support & don’t support, be realistic and then have the vendor explain to you — how their solution can best support your business.
2. Over-customizing your solution:
Although software customizations can help you to meet your unique business needs, these adjustments are not easy and cheap. There may be a few areas where you’ll surely need to customize but avoid the desire to customize everything. This implies that you must be careful when it comes to accepting software modification requests from your staff. Otherwise, you might experience unnecessary scope expansion, cost overruns, and negative ROI as a result.
One of the best ways to avoid this situation is to choose an ERP solution like iCast that is exclusively designed for the foundry industry so that almost all the requirements of a typical foundry are readily available.
3. Lack of commitment from key executives:
Selecting a decent ERP solution for your foundry is most important. However, people are at the core of your project. Without the support from key executives of the foundry, projects like an ERP implementation can’t go much far ahead. Key executives from all the departments along with the top management must be appropriately involved and needs to show strong commitment during the ERP implementation.
If these key people are actively involved, then the other employees are more likely to follow them by showing more interest during implementation and training. However, the lack of such commitment from the foundry management itself is one of the key reasons behind the failure of some ERP implementation projects.
4. Not aligning clear priorities:
Strategic alignment is essential to the successful implementation of any enterprise software project. This is especially important during software evaluation and implementation for prioritizing product functionality. The members of your project team may have different opinions on which features should be mandatory and which ones should be on the optional list.
While it's good to listen to various perspectives, your team meetings should ultimately be productive and unifying. Together, make a list of features your new solution must have. Decide on the top priorities of your foundry and make sure everyone involved is on board with these priorities. Your project is likely to encounter a significant delay if these priorities aren't established early on. This happens when end-users request customization or additional functionality when the system is almost on the verge of going live.
5. Not inducing a culture of change:
ERP software is not a magic wand that will accomplish every objective of your foundry in one go. While a foundry-specific ERP like iCast can certainly provide you with a superior competitive advantage, the continued success of such a solution also requires an everyday commitment to change. This is why change management is well applicable to all the foundries.
Although you might have heard about change management earlier, to elaborate on it we must mention that, it is most effective when it is organization-based rather than just project-based. This means that apart from encouraging your team toward an ERP project, you also need to inspire them toward the overall digital transformation the foundry might propose. So, the months following your ERP implementation are not just about adopting the latest software, but also a time for continued acceptance of the new technology and the additional changes you may implement over a period for extended digital transformation like mobile application, IoT-based process automation, digital marketing, etc.
Conclusion: An experienced software vendor will understand the pain areas and your priorities, configure realistic deliverables around them, use benchmarks of what other foundries similar to yours have achieved, and plan the implementation accurately to make sure you get it right. However, as top management, you will need to ensure that you avoid the above-mentioned pitfalls during the ERP implementation in your foundry.
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