The Success Factor – How to Identify and Minimize the Risks of Software Implementations
As the CEO of AdvancePro Technologies, I have worked with hundreds of small and medium-sized businesses to help them take control of their inventory management processes. We offer a highly functional enterprise program that touches multiple parts of our customers’ businesses, and it’s adoption represents a major shift in their work processes. We’ve put a tremendous amount of work into our software, but my experience has shown me that it’s the effectiveness of the implementation that really makes or breaks inventory management success. Most estimates of ERP implementation success rates have it below 50%, and I’ve been around long enough to have seen my share of failed adoptions. I’d like to share some of the common elements that I have seen in failed implementations, and some ideas for how to overcome them.
The leadership view the solution as a cost rather than as an investment
In a small business, every member of the management team has their eye on the bottom line, and enterprise systems can certainly cost a pretty penny. But when I see potential customers who are only looking at the short-term, it raises a red flag. It’s likely that they don’t fully appreciate the long-term value that the system can provide, and this problem needs to be addressed before even considering implementing a new system. Organizational change needs a strong base of support and engagement from the beginning of the project in order to build momentum and overcome early obstacles. If you’re leading an enterprise implementation, I recommend trying to quantify and properly communicate the expected returns that you can reasonably expect to get in 6 months, 1 year, 3 years and 5 years. The more tangibly you can demonstrate the business impact of this investment, the more buy-in and engagement you will get from stakeholders.
The owner is spearheading the project alone
Every implementation project needs a champion, somebody who understands the need for the new system and can get buy-in from people working in different functions. But when that person is the company’s owner, you need to be sure that there is somebody else to shoulder the load as well. If you’re an owner looking to lead the charge on an implementation, you would do well to consider delegating the responsibility to one of your employees or outsourcing it to a consultant. Additionally, many companies support their solutions with implementation services that handle varying degrees of the planning and onboarding work, and this should be a consideration when evaluating different options.
Many of our new clients are making a shift from managing their inventory using Excel, QuickBooks, or even a pen and paper. This change has a dramatic day-to-day impact, not just on larger business processes, but also on individuals within the company who will be using the system, and their support can make or break the success of the project. Change is difficult, and research on the subject has revealed that many people push back on change because they fear that it’s a risk to their job security and status. If these concerns aren’t identified and addressed it can lead to passive or active resistance. A strategic and proactive communications plan can help put people at ease and show the ways that the new system will affect them, and what will need to change, as well as what will stay the same. Whether the news is good or bad, having clarity will help ease the tension of the unknown.
Impulsiveness and Poor Planning
I’m always surprised when I find companies that want to dive head first into our software without thinking twice. As much as I may want the business, I’m aware of the inevitable problems that arise when a company is impulsive, and I try to get them to pump the brakes. Your business might be in pain and in desperate need of a change, but a deliberate approach will always take you further than rushing in blindly. There are two things every company should do before an implementation:
- Start with the end in mind. What problems are you trying to fix? Take the time to understand the process and SET GOALS. These goals will keep everybody focused on the same target, and will serve as a basis for ROI measurement.
- Create an implementation plan. Make sure that the actions and tasks needed are mapped out, and the stakeholders are designated and ready to execute. There will be data to be configured, training to be administered and testing to be done (repeatedly). If there’s one thing I can leave you with, it’s that testing is key, and if you haven’t been thorough in this process it can be the beginning of years of headaches and technical nightmares.
I’ve shared these tips many times over the years, and they have helped my clients successfully implement at a rate well above the norm. There are many reasons why a project can become derailed, but lack of preparation shouldn’t be one of them. Given the importance and size of this investment, you owe it to yourself and your stakeholders to be fully committed and engaged, and to assess, identify and remove threats to success. Understand that these projects can be highly complex and subject to the influence of internal and external forces, and will prove to be a test of the resolve and resilience of your team. But the payoff can be a complete game-changer, so buckle up and enjoy the ride!