Small businesses are different, especially when it comes to implementing ERP systems. Although many of the causes of ERP failures are the same for all sizes of enterprises, there are some that are particularly common in smaller firms. These arise from relative lack of resources and experience which are typical of smaller companies.
Generally what happens is a failure to recognize that not all the activities involved in implementing an ERP system scale. While some things will vary with the size of the company, other activities are relatively scale invariant. In other words they are just as much work for a small company as they are for a much larger one.
Fortunately these problems aren’t hard to spot if you know what to look for, Once you recognize them, they are easy to avoid.
Here are some things that small implementers need to watch out for.
Skimping On Selection
The process of selecting the right ERP package is involved and complex, no matter what the size of the enterprise. There is a temptation for small companies to cut corners on picking the right one. This is a mistake that can lead to trouble down the road.
It is important to take the time and effort to get the ERP package that most closely meets your needs. This isn’t significantly less effort for a small company than a big one.
Not Allowing Enough Time
One of the other things that doesn’t scale well for small companies is the amount of time it takes to implement the ERP software. While some parts of the process do vary with the size of the company, other parts do not and it is a mistake to assume that time will vary overall.
Size of the Team
Again, this depends more on the complexity of the installation than the size of the company. You need to make sure you have all the bases covered when putting together the implementation team, no matter how big or small you are.
Shorting On Testing
While the amount of time you need to adequately test an ERP system will vary somewhat by the size of the company, the basic process doesn’t vary that much. It depends much more on the complexity of the installation than the size of the project.
Make sure you allocate enough time to the test phase to run down the bugs and other problems and correct them. There’s a temptation in a company of any size to underestimate the time needed for testing, but if you skimp on this phase, you simply add to the time you spend debugging after you go live.
ERP is expensive to implement and that’s true of any size project. This is emphasized by the fact that many ERP projects run over budget.
These overruns are likely to be especially damaging in smaller companies because of the lack of total resources. If the project goes over budget there is likely to be less money to put toward the implementation.
Treating the Implementation as an IT Project
Because ERP is built around technology there is a tendency at many companies to view it as an IT project and expect the IT department to lead the way. This is a mistake in any size company, but it tends to be especially important in small companies because they don’t have IT departments that can take the strain. ERP is a company wide effort and it needs to be led by general management.
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