August 20, 2018

Failed ERP Software Implementation? Don’t Rebound with the First Vendor You Speak With

Written by
Ilmie Sham Ku
Tags: ERP

Disappointment, frustration, regret and maybe even a little heartbreak…the feelings you’re left with after a failed ERP software implementation are difficult and valid. Considering the amount of energy you spent on finding and implementing the project – it’s hard not to take the failure to heart. You may feel the urge to play the blame game or rebound with the ‘runner-up’ vendor during your software search to rectify the problem as soon as you can and erase the memory of the failed implementation altogether, however, both are very bad ideas.

First, blaming the vendor or perhaps even team members for all the wrongdoings of the implementation will not help you improve your processes any faster and rushing through the sales process with the first vendor you speak with after the failure will most likely end up with the same unfortunate situation repeating itself.

As with most breakups, it’s always best to really take the time to re-evaluate your needs and expectations as well as things you need to change internally before speaking with new vendors. Take this transition period to regroup with your team and ask yourselves what went wrong, and what you need to change before putting your feelers out there again. While this may be an uncomfortable discussion to have, it is a necessary one.

Have an honest review of the mistakes made by your end as well as the vendor as they are valuable to learn from so you don’t repeat the same mistakes. Consider the following:

Internal Factors

Stakeholder/Employee Buy-In

As we know, introducing new technology to your distribution business is only a part of the solution to improve/fix operational processes. Before anything, it’s important that you have all stakeholders and employees’ buy-in and support meaning they are all on-board and open to the idea of implementing another system and potentially changing internal processes this time around in order for the new system to be a true success.

As with any software implementation failure, you’re going to have employees that are reluctant to give yet another system a chance. It will be tough to convince them otherwise but not impossible.

Communicate to the team the ways that this new implementation will be different. Keep in mind that many employees may not even be aware of what ERP software is and all the benefits that come with it. This makes it important to start at the beginning. Educate employees on what an ERP system is capable of and how it differs from any introductory software such as QuickBooks that the company has used previously and how the new system/vendor will differ from the failed implementation.

Hold internal meetings to help employees understand what the main objective of the new ERP software is and how important their roles are to make sure that it will be a success. Identify any productivity hindering processes by departments and roles such as manual data entry for accountants or duplication of work for warehouse pickers, or manual reporting for managers, and communicate that finding solutions to these problems are a priority in the next software search to really get them excited and willing to learn more. Allow your team members to share what they liked and what they didn’t’ like with the previous software as well. This will offer you greater insight into some of the factors you should be looking to have in a new system.

It is also important to let employees, as well as stakeholders, know that full training on how to use the software will be provided to them to help them understand how to navigate the system. Clarify that the transition will not have to be made overnight and they don’t need to rush the learning process. You are there to support them through every step of the way and facilitate any additional training they may require.

Changes to Processes

In order for the new ERP software be successful this time around in your business, you have to be flexible and open enough to change some internal processes for you to get the most out of the software. Ask yourself, did you listen to any advice that the previous vendor had about process changes and change management? Did they provide advice at all?

A good vendor will work with you to analyze which areas of the business could be improved whether it’s the way you have your inventory set up in the warehouse, how orders are being taken, the processes for picking, packing and shipping inventory, how you manage reporting etc. Listen to their valuable input as they know how their system works the best and how to streamline and automate steps in the software in a logical manner that takes into consideration how the business operates.

Manage Expectations

It’s important to do your research and speak with vendors about what type of result to expect from a new software solution. For example, you need to set a realistic timeframe for implementation – while it may be tempting to have employees use the software right away, setting up a system too quickly can cause many problems and errors with employees feeling overwhelmed to learn the new system as soon as possible. Leave lots of time to make the transition and make sure to implement the system during the slow season for the business.

Cost expectations are another factor and another reason to not go with the first vendor you speak with. Create a shortlist of the top software companies you’re interested to learn more about and evaluate cost by the type of functionality you will receive, the type of support and services that come with the purchase, training etc. The cheapest system is not always be the right choice and can lead you down the path of another failed implementation if not evaluated properly.

Finally, setting expectations when it comes to functionality is also important when speaking with new vendors. Chances are that very few (if any) vendors will be able to match your needs 100%, and it’s more likely that some will be able to address about 70%-80% of your requirements. If there are very specific and unique aspects to your business that are not typical with distribution businesses, you will need to have some custom work done which can add to the cost of the software.

Another way to manage expectations is to speak with references from the vendor that have a business in the same industry and of similar size to yours, to learn the type of results they were able to achieve with that specific software. For example, how much time were they able to save when it comes to reporting and picking/packing inventory?

Vendor Factors

Sales Process

Be selective in choosing which vendors you speak with. You can get a good feel for what your relationship will be like with a vendor from the very beginning during the sales process. Not all ERP software vendors will have the same processes to qualify businesses and make sure that their system is a good fit for your needs. Go with a vendor who takes the time to get to know the business and your needs thoroughly. Chances are that your first ERP implementation didn’t go so well because things were missed during the sales process.

Avoid vendors who focus only on the sale and not the promised delivery of performance. Signs to watch out for are not having references and not willing to or uninterested to learn the ins and outs of your business.

Support/Service Packages

There are different types of support and service packages that come with the software. Depending on the vendor, you may receive a package of a set of support hours and services that are factored into the initial cost of the software. These services are not to be overlooked – really take the time to evaluate and compare them by the vendor as things like training and technical support are vital to the success of adopting new software.

Be sure to ask if data migration is part of the service package – some vendors will have automatic processes in place to transfer any existing data in your current system over to the new solution. This will save you hours and hours of time manually transferring the data yourself.

Employee Training

An ERP system is only as good as the users that utilize it on a day-to-day basis. Training users is instrumental in the success of the project. Go with a vendor who is available to come to your location to train you and your employees face-to-face. Good vendors will work with your company to determine the best training methodology, who they should train, what type of training is required and the best time to train employees.

They will go over what is only relevant to each employee type – for example, warehouse pickers need to be trained differently than the accountants in your business. Training should be customized to individual roles and job-specific tasks.

Be sure to ask vendors if they have additional eLearning resources available. This is also a great asset to employees where additional online resources are available as references or for employees to learn at their convenience. Take full advantage of all these (often free) resources that the vendor has to offer their customers.

Open Communication

As with all relationships, communication is everything. Open dialogue or lack thereof from you as well as the vendor is the make or break factor to any software implementation. The vendor has to be open to discuss any issues and concerns you may have and provide legitimate solutions and you have to be open to vendor suggestions and workarounds. It will be easy to identify such vendors from the very start, during the sale process phase as they will treat your concerns with care and great detail. By signing a contract with a vendor you are signing off on a new relationship with that company to work together to accomplish the goals that both parties have set forth in order to make the software implementation a success. Make sure you’re both frequently communicating and are on the same page about the priorities of the company, short and long-term goals and realistic results.

Ilmie Sham Ku is the Content Marketing Coordinator at Blue Link Associates– an ERP company providing integrated inventory and accounting ERP software for small-medium size businesses. As an all-in-one system, Blue Link helps businesses streamline and automate their processes by providing inventory management, accounting, order entry, warehouse management, and customer relationship management.