An organization is often anxious when they get to start ERP implementation. Systems integration is often their biggest concern.
How will our existing systems interact with the new ERP system and how can we ensure data integrity?
This is a legitimate concern, as even if systems integration has been planned carefully, there are always risks. These risks can be a threat to your project and you need to be aware of them.
We're sharing some system integration risks today that could cause data issues and ERP Failure if not addressed.
8 ERP System Integration Risques
1. Underestimating Project Risks
You may not have experienced a similar project if you don't know how far it could go. Even ERP vendors or systems integrators may make you laugh.
You can save money by choosing a provider who offers a simpler approach but you might end up spending more money in the long term if things go wrong.
2. Avoid complicating your approach
A big-bang ERP implementation integrates all of your systems in one phase. It can be very effective for certain organizations but can also lead to excessive complexity. Data integrity can be compromised across your systems if even one problem occurs.
Focus on the quick wins you are capable of achieving, rather than trying to do everything simultaneously. Your team will grow stronger over time and be more capable. You'll be able to take on bigger milestones.
3. 3.) Committing to an unrealistic schedule
You want to be there as quickly as possible. But don't make it harder than necessary. Unrealistic timelines are one of the leading ERP reasons for failure.
While aggressive rollouts are not always a red flag, it is important to avoid putting your resources at risk. Discuss with your team how much time should be allocated to each component of the integration.
4. Blindly trusting a firm-fixed-price contract
Common misconception: firm-fixed-price contracts (FFP) are the most risk-free agreements. These can make your project riskier.
Your systems integrator might focus only on the cost and schedule of your project and ignore other aspects, such as operational risks. Sometimes, systems integrators may make decisions or take action based only on your timeline or budget. This could leave out obvious issues that could cause data inconsistency or major operational disruption.
5. Experiencing Staff Turnover
The implementation of your system could be affected by a team change. This is not just for project managers. It can also affect the ability to integrate your systems effectively if there are changes in any of the people involved.
Although you cannot guarantee that everyone will stay at your company during the project, it is possible to reduce this risk by being proactive. Get written commitments from everyone involved before you start systems integration. Before they agree to participate in the project, make sure that they are available for the duration.
6. Don't Wait Too Long to Test
It is crucial to identify problems early when it comes to system integration. You can then take corrective steps before they escalate. This is essential for ERP software implementation. It means that you must test early and often.
You don't have to worry about how much time this will take. There are many ways to speed up the process without sacrificing quality.
You can, for example, use test scripts or automated testing tools. This will speed up the process while still ensuring that it is thorough. You are creating an environment that facilitates early and complete detection of problems.
7. Underemphasizing Change Management
Because ERP system integration is a complex task, it is easy to get lost in the technical details. It's important to remember that people and processes are equally important. This means that you need to ensure your employees are familiar with the downstream and upstream processes involved in manipulating data.
This is crucial because data handling can hurt multiple departments. Employees in other departments can be affected if they are not informed or have a lack of empathy.
While training employees can be beneficial in introducing new processes and identifying data and process owners, managing resistance to change is another part.
Major transformations can cause resistance and hesitancy in many companies. Employees are not to blame if you re-engineered business processes and changed workflows they already know.
We recommend that you invest in organizational changes management activities to ensure your team understands the details of the project. This includes designating change champions.
Mitigate Your ERP System Integration Risks
It is a very exciting time in your company's life. But before you make any decisions, think about the following factors and how they might impact the integration of each of your systems. Any risk that could impede the seamless flow should be addressed as soon as possible.
Request a consultation to help you navigate these next steps. Our ERP consultants have experience working with system integrators and are familiar with the various factors that may impact their efforts.