How to Avoid ERP Project Delays Before They Happen

By: Richard Leigh Stout    July 23, 2024

It’s no secret that ERP project delays can cost your company valuable time and money. But what if you could get ahead of the reasons causing such delays?

In this post, we’ll take a look at some of the top causes of ERP project delays. We’ll also discuss proven ways to pre-plan for, and avoid, factors that can contribute to slowing down the implementation process.

Put another way, the most cost-effective and efficient way to make sure your ERP implementation succeeds is to get it right the first time.

But first, let’s discuss the significance of an ERP and how it adds value to your company.

The Role of an ERP

An enterprise resource planning (ERP) system is the back-end infrastructure that helps your organization run its business effectively. It supports automation in finance, HR, procurement, supply chain, workforce management, and other areas. It also provides structure and clarity with regard to business operations.

With the increased agility and flexibility an ERP provides, it’s no wonder organizations are continuously evaluating cloud-based ERPs to implement and grow with their business.

Infor CloudSuite is a popular choice among organizations in healthcare, hospitality, retail, and the public sector. Because it lives on the cloud, it provides unmatched affordability, scalability, and security.

Avoid the Pitfalls and Maximize the Possibilities

While migrating to a cloud-based ERP system can be rewarding for organizations, it can also be challenging and disruptive. There’s always the potential to go past the timeline—and over budget.

For example, a recent survey in the U.K. found that major ERP projects take six months longer than estimated to go-live. In fact, retailers in the U.K. experience an average of 200 days of delay due to major back office software implementations.

Delays, of course, turn into dollars. According to the U.K. survey, ERP projects cost an average of 27% more than predicted. And 34% of U.K. firms have gone through a “major failure” during ERP implementation within the last year.

Poor planning of your implementation project can lead to staggering financial losses—in sales, stock price, number of shareholders, and more.

One way to start thinking about potential pitfalls is to create what-if scenarios, such as, “what if we weren’t able to deliver any products or services for a month?” or “what if we couldn’t close the books at the end of a period?” Then, try to get a sense of how much that scenario would cost your company.

Conversely, when organizations take the right steps during an ERP implementation, they can take advantage of lower labor costs, simplified budgeting, and automation/optimization of resources.

In one study, nearly half of companies reported they saw enhancements across all their business processes after implementing an ERP. So, while investing in an ERP requires a large upfront investment, it can save your company money and time in the long run.

Let’s take a look at what to avoid to ensure your ERP project succeeds.

Failing to Plan is… Well, You Know

When you undertake an ERP implementation, you’re setting the foundation for your organization’s back-office infrastructure for the next 20 to 25 years. Let that sink in for a moment.

So, what are some of the causes for project delays? And how can your organization avoid most or all of them? Most problems related to budget and timeline overruns don’t happen overnight.

Here are some of the reasons ERP project delays happen in the first place:

1. A shortage of people: Underestimating the number of people it takes to implement an ERP is a common problem. Making up for a shortage of staff adds costs in hiring, training, and more. Plus, you need the right people: experts in data, product management, change management, and so on.
2. Underfunding: Unforeseen costs can slow down your ERP project. These can happen when the implementation provider or partner isn’t upfront or transparent about what the costs will be. In addition to the cost of the actual software, expenses related to licensing, support, training, maintenance, data migration, and so forth should be considered from the start as well.
3. Unclear goals: When you don’t have well-defined goals for your ERP project, ambiguity and confusion can be the results. Setting and communicating clear goals is critical to your project’s success.
4. Lack of oversight: Without a dedicated project manager who’s responsible for keeping the implementation on track, there’s no “point person” for resolving any problems that may arise throughout the engagement. Roles of managers and stakeholders should be clarified and documented.
5. Unrealistic timelines: Being too optimistic about particular deliverables for your ERP project can lead to unrealistic expectations regarding the timeline for the entire project. Also, not rolling out your deliverables incrementally can leave you open to risks.
6. Unforeseen issues: Similarly, not making contingency plans is almost an open invitation for unforeseen issues to arise and cause delays to the ERP project. Before any coding begins, possible risks should be identified and contingency plans put in place. This includes documenting any disaster recovery protocols.
7. Scope creep: Your project’s requirements should be agreed on by all stakeholders at the very beginning, before any of the actual implementation begins. If you need to rethink items that are crucial to how your business runs, it’s best to have a solid change management process in place.

In summary, companies can easily be overwhelmed by all the moving parts involved in an implementation. It’s no wonder that some of these considerations get overlooked in the process and subsequently ERP project delays follow.

Stay on Track to Avoid ERP Project Delays

So, what can you do to keep your ERP project running smoothly? Here are a few things to do, and some examples of things to avoid:

1. Set clear project goals: Make sure to involve your whole team in the goal-setting process. When considering your objectives, be sure to look at your company’s current pain points as well as its plans for the future. For cosmetics maker Revlon, poor planning led to a failed implementation. They were unable to fulfill orders because their ERP wasn’t set up to account and record for inventory. This issue led to a drop in stock price and lawsuits from shareholders.

1. Develop a realistic timeline and budget: This means making sure that you have the resources you need to help your project be successful. You’ll also benefit from reviewing your timeline and budget once the implementation is underway; it’s better to know about any delays or discrepancies as soon as possible. Apparel brand Nike rushed its ERP project, on which they spent $400 million. They attempted to deploy a supply-chain management system alongside its current ERP system rather than the ERP system they were implementing. It took Nike seven additional years and an added $500 million to get the project back in line.

1. Establish a clear change management process: Doing so will help educate stakeholders on the value and risks associated with change. Having a sound process for change will enable your team to advocate for goals, mitigate potential pitfalls, and encourage user adoption at a faster rate. ERP projects are technical in nature, but given how disruptive they are to day-to-day operations, their success is also reliant on the people who will be using the systems. Prioritizing resources for ERP change management will help ensure overall project success. German grocery chain Lidi didn’t have an effective change management process, and struggled to make complex customizations during its ERP implementation. It’s no wonder Lidl’s attempt to consolidate approximately 90 systems into one failed, and ended up reverting to its old system.

Choose the Right Software and Technology Partner

Be sure to evaluate your ERP software vendor and partner consultants carefully; both should align with your organizational values, and have a track record of success in industries like yours. One survey noted that 87% of companies express a need for guidance during an ERP implementation.

The company that conducted the U.K. research mentioned above noted that “businesses should create a checklist of requirements their back-office solution should have before making a major investment,” and that “having a team of experts on hand to guide the implementation process from start to finish” is crucial to success.

That’s exactly why savvy organizations are leveraging technology such as Infor CloudSuite, and adopting best practices from experienced technology partners like RPI Consultants.

Organizations that implement Infor’s cloud-based solution benefit from simplified architecture, reduced physical hardware costs, greater uptime, better security, faster updates, and increased employee productivity.

RPI offers a proven pre-planning process that can significantly improve the success of your CloudSuite project. It occurs before a CloudSuite engagement and helps set up the necessary infrastructure for the implementation. The goal of pre-planning is to evaluate the level of work required, and determine what’s needed on day one of the go-live. It’s always a good idea to begin with the end in mind.

To learn more about how RPI can help your organization avoid costly ERP project delays, contact us below.