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Reasons for failure when implementing ERP of enterprises in Vietnam

May 14, 2021

There are many reasons why ERP applications become unsuccessful such as high costs, not seeing the effectiveness after implementation. But these are not the main reasons why business digital transformation with ERP fails, so what is the main reason? Let’s find out in the article below.

For medium and large-sized enterprises, managers have planned to build a professional management system like ERP, but most of them make certain mistakes:

1. Unclear and inconsistent goals when implementing ERP

Unclear goals are the cause of business failure – Source: Linkedin

The reality is the lack of clear governance orientation for ERP implementation of enterprises that want to grow in scale, and do not take the time to fully understand the values ​​and measurement scales when applying the system to management. treat. Moreover, the troubles when implementing ERP that businesses encounter such as:

  • Departments cannot come up with a clear process, instead, there is a loose and methodical management chain. Thus, the failure rate right from the proposal stage to the leadership and implementation partners cannot meet the standardized system.
  • Enterprises cannot specify future development plans from human resources, departments, organizational structure… so that partners can advise accurately.

The lack of clear governance orientation for ERP implementation of enterprises that want to grow in scale, and do not take the time to fully understand the values ​​and measurement scales when applying the system to administration. treat. Moreover, the common troubles when implementing ERP that businesses usually encounter are:

  • Departments cannot plan out a clear process, instead, there is a loose and vague management chain. Thus, the failure rate right from the proposal stage to the leaders and implementation partners cannot meet the standardized system.
  • Enterprises cannot specify future development plans from human resources, departments, organizational structure… so that partners can consult appropriate advice.

Besides, the lack of consistency is a huge cause of failure when implementing ERP, such as the managers want to use ERP to manage their business, but the employees complain about the complexity, difficulties … As a result, managers give up this idea of ​​digital transformation. Certainly, the transition will cause employees to discomfort due to the change in work habits. At the same time, ERP is only effective when there is a standardized process that requires all departments to participate, the control and challenges in correcting when there are errors are also the cause of employee dissatisfaction.

2. Lack of structured management

There is always a commitment in management from the enterprise in all ERP projects, including department heads, employees, etc. The enterprise does not have a specialized team to coordinate with the ERP solution provider. , to be able to represent the business and be able to support the operation of ERP later.

To be specific, at the implementation stage, the management team is not directly involved in understanding how the system works, or the human resources are not enough to manage all the processes. These will take a lot of time for the whole enterprise, and when continuing to deploy, more resources will be wasted…

Therefore, to run an ERP project successfully, the enterprise resources must be allocated tasks for close monitoring. With that, the communication process and workflow will operate smoothly.

3. The deployment team lacks expertise

Have you ever bought an item, but the quality is not as expected? And the same goes for ERP implementations. Choosing the right implementation partner for the project is substantially vital because the success rate accounts for more than 50%.

In each ERP project, the key role of the partners is to analyze, evaluate, understand the business structure, and plan out each stage of the implementing process. And of course, the cost of cooperating with a professional team is not cheap based on the profile, implementation experience, etc., but in return, the results are worth the costs. And BEMO is the optimal option to cooperate with, as well as the team of SPECIALISTS will give detailed advice for a successful project.

4. Lack of communication and connection

Lack of communication and connection – Source: Blog in

Coordination is very important between the implementation team and the project team of the enterprise when building ERP. Imagine that, in a project, information comes only one way from the implementation team, which can easily lead to incompleteness because they cannot capture innovations in internal processes, or arising policies.

Therefore, enterprises that want to implement ERP need to connect and communicate continuously with implementation experts to promptly update innovations. From there, the process of building an ERP system is easier and more successful.

5. Yet or do not have standardized procedures

The line between success and failure in ERP implementation is that enterprises must be consistent in the process of converting from papers to digital technology? Because if the project has started, businesses want to make too many modifications in the process compared to the initial one, leading to higher costs in human resources, time, and difficulties for the deployment team.

In addition, when the business has too many changes in the operating process, the complexity increases, and the ERP solution may no longer be effective.

6. No budget plan

You want to buy a luxury car, but have not prepared any money, then it becomes impossible. That means, before starting to build an ERP system, managers should have an estimated budget based on business needs. At the same time, this will help the implementation experts to provide better consultations, create financial plans, and predict the most accurate project completion time.

When there is no specific budget, businesses should take the time to calculate and estimate costs by contacting and discussing with partners to accompany the implementation.

Above are the 6 reasons that we find most prone to failure when implementing ERP that businesses should consider. However, you should think about the benefits that ERP will bring to your business and decide the most optimal solution. Hope the article brings useful information to you, and please follow the BEMO page for new articles. And if you need advice, please contact us here.