While implementing ERP software systems different companies encounter different types of challenges, these are largely due to size of the software and its vast effects on the working of the company. An ERP integrates all the departments of the company through one single application and provide real time information and data to all the departments irrespective of its point of entry. The features of ERP span its effects on the whole organization by affecting present working system, introduction of new work processes, re-engineering on going processes and compliance of best practices. Change of such magnitude faces some stiff challenges which can be overcome only by prior planning.
Support of top management is very important if not a challenge for successful ERP implementation as people at the top level of the company have the authority to allow the changes which may have huge impact on the company's working pattern. Sometimes such changes are compulsory for successful ERP implementation and absence of support and trust of top managers of the company may not let this happen which leaves serious gaps in the functionality of the ERP even after its proper implementation. Such gaps become impossible to handle at later stages either by the internal IT support team or by the vendor which leads to the failure or under utilization of ERP capabilities.
Integration of legacy systems with new ERP software is another challenge for successful ERP implementation which vendors face during implementation. The data stored in such systems can be of many years of working and very crucial and precious for the company. Leaving it with the old systems may not allow the new system to have necessary inputs for working efficiently according to the needs of the company and without its integration it may end up in two parallel running systems in one organization. This task can be easy at times and sometimes daunting. Either by converting the data according to the format desired by the new system or by integrating old applications with the new system to utilize the data already fed in their databases is the only ways of overcoming this challenge. Data quality shall be checked before beginning the implementation process to confirm whether its conversion will be possible according to the new system or not.
Proper handling of change management is also an important factor which determines success of ERP implementation and its operation at later stages. Right from the beginning of implementation process all the stakeholders in the new system shall be involved to actively participate in the process. Demonstration of ERP, selection, requirements, dry run, testing and implementation strategy shall be done in presence of the entire team to grow and maintain confidence and trust of all the employees in the new system. Some delays, errors and problems are bound to occur during implementation of software of this magnitude, if key employees of the company are kept motivated then it becomes easier to overcome the challenge.
Every company has its own problems and working pattern and similarly the challenges they might face can be quite different from each other, but these are some commonly evident challenges for successful ERP implementation which quite easily get neglected during most of the implementation processes, till they become almost unmanageable.