10 Global ERP Implementation Challenges You Need To Know
Life is full of challenges and global ERP implementation projects are no different. From lack of engaged leadership to the wrong choice of software, there’s many reasons why international ERP implementations fail. To be successful, organizations need dedicate time to thoroughly analyze their existing systems and processes. Read more about the pitfalls you should be aware of when implementing a global ERP project.
Effective change management is needed
Here at Pipol, one of the main reasons we have seen ERP projects fail is the underestimation of the cultural impact. Sometimes the software doesn’t fit the local culture, or regional markets are not prepared to take ownership of the project. There can also be a lack of adequate cultural management processes as well as unaddressed cross-functional diversity. Building a corporate culture that’s ready for change comes from the top. That’s why change management should be a top priority for organizations embarking on global ERP implementation. It’s possible to reduce project risk by effectively managing change throughout every region and subsidiary and not just focusing on the headquarters.
Engage the entire organization
Successful project implementation requires commitment from everyone in the organization. But another reason why global ERP implementation projects often fail is a lack of leadership buy-in. When top management supports such projects, implementation runs much more smoothly with timely decision making and a commitment to allocating the resources when and where they’re needed. In addition, it’s vital to involve the users in the regions as much as possible. By actively engaging with them and gathering their input they are more likely to feel ownership and accept the system when it’s rolled out.
International organizations often have non-standardized business processes. This is especially true for organizations that have been acquired. By implementing global ERP software, such as a global shared services ERP model, organizations can standardize these processes across all locations. However, this can be a difficult task. Global ERP implementations need to balance standardized and localized business processes and systems and identify the processes that add the most value for customers.
Cloud ERP implementation
Cloud ERP solutions are entirely managed by providers, making them easier and more cost-efficient to adopt. And, unlike on-premise deployment, they don’t require expensive hardware or costly start-up, maintenance, and upgrade costs. Additionally, cloud-based solutions are modular-based and with SaaS ERP solutions, organizations only need to pay for the modules they use, allowing them to have tighter control of their budget. However, information is solely available through the web, and this presents security risks that can lead to system failure. Therefore, it’s important to be proactive in protecting your organization from fraud or threats. And ensure your staff is trained in how to spot and report unusual activity.
How to roll out global ERP
Once you’ve defined the system and business processes, you then need to define a multi-country ERP implementation plan for how to roll out to end-users. For instance, should you go live with all functionalities and all geographies at one time? Or should you take a more incremental approach with multiple rollouts focusing on specific regions and/or functions? Oftentimes, due to limited resource availability or legacy system constraints, organizations prefer a more hybrid approach to implementation. This can also help reduce project risks allowing you to test parts of the system as you go.
Global ERP Support Structure
Global ERP implementation is one step in the ERP process. Whether you decide to go live in all locations at once or take a more incremental approach, before the first rollout, it’s important to define a plan for how to manage your ERP software—and from where. For instance, will there be centralized ERP support and help desk functions? Or will you offer decentralized support to address a more diverse end-user base? By defining this support structure early on, end-users will be more encouraged to fully adopt the software so they can begin to enjoy all the business benefits.
Language and Currency
Global ERP software implementations allow global organizations to standardize business processes, so they have global visibility into all their operations. Local requirements often present challenges here, especially when managing data and transactions in local languages and currencies. Here, organizations have some important decisions to make in order to find the right balance. For instance, you need to ask yourself how you’ll standardize global data to aligns with the English language and US dollars while also allowing the system to handle multiple languages and currencies.
Master Data Management
Master data is an important part of an effective ERP implementation and enables organizations to share data about customers, vendors, items, prices, and more. This data needs to be cleaned before migration to the new system. And again, this task requires a great of attention to ensure data isn’t duplicated or inconsistent. Organizations also need to define a plan for how to manage the data moving forward. For instance, will changes to local accounts, such as a new local supplier, require centralized, global approval? Or will local entities have the flexibility to manage their own local accounts?
Pick the right global ERP software
With tens of thousands of ERP solutions on the market, how do you decide which ERP solutions is right for your organization? Some solutions focus on whole industries, others on geography, and others are segmented slices of industries. Thankfully, the broad range of options means most organizations can define a customized approach to suits their specific needs. Organizations need to ask themselves what is the end goal that aligns with the business requirements? How much might the business grow, short term, and long term? And what are the industry standards that need to be incorporated into the solution?
Don’t cut corners
ERP solutions help you adapt your business processes to an ever-changing world by providing you with the flexibility and possibility needed to respond to future changes. But successful ERP implementation takes time and if you don’t plan adequately, you might need to re-employ some of your efforts, which can mean huge additional expenses. Remember, your new ERP solution will powerfully impact your user community. So, you need to ensure your processes are consistent, your training is in place, you’ve documented test cases, you have buy-in from leadership, and you’ve aligned your software strategy with your organization’s business objectives.
Are you ready for change?
Are you considering a new global ERP solution? Or perhaps you’ve already started but the project is experiencing some missteps or heading in the wrong direction? With our expert guidance, local resources, implementations based on best practices, and tight project management, Pipol has the functional competencies and global presence needed to support our customers wherever they’re located.
Get in touch with Pipol today to learn more about how we can guide you through this process.