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ERP Software Implementation Risk Factors

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Enterprise Resource Planning is a high-end solution featuring integration of various business processes data and its application. It seeks to streamline and integrate business processes and information flows in the organization to integrate the resources. Each implementation is unique and involves different risk factors. While implementation enterprise software organization should be aware of those risk factors. To identify the various risk factors organization should be focused on following points.

ERP Software Selection: Right selection of software is the key to successful implementation. If it is chosen wrong, no software vendor can implement correctly according to your business processes.

Implementation Process Steps: This should be predefined by the experts. Organization should move according to the defined steps. In most of the cases, during implementation organizations come to know about some functionality and want to add those functionalities at the same time. This increases the project cost and timeframe, which results failure.

Implementation Partner Track Record: Organization should check the track record of vendor. Implementation partner should have good implementation track record in similar type and size of company. Organization may ask to vendor for client visit to see the running software and its functionalities.

Business Process Mapping: Process mapping is pre-implementation work which is done by organization with help of consultants or industry experts.

SRS Study: SRS (System Requirement Study) helps to understand the all requirements required to implement enterprise software.

GAP Analysis: GAP analysis helps organization to identify gap between enterprise software and present business processes. This helps in identifying the customization needs. Organization should freeze the customization needs. This helps in preparing implementation road map, timeframe for implementation and project cost analysis.

Analyze TCO: TCO (Total Cost of Ownership) should not be very high. Organization should consider all costs viz. software, hardware, networking, training, implementation, customization, services etc.

Implementation Road Map: It should step wise as per road map prepared by consultants. During implementation one should not create wish list.

AMC Cost for Services: AMC (Annual Maintenance Cost) for services is very important. It is recurring cost for long terms. It should be in your budget. I have seen few failures due to AMC.

AMC Cost for Software License: Organization must take AMC for software license. It covers software updates, upgrades, new features and functionalities, etc. Before selecting the software, this cost should also consider by an organization. SAP AMC cost is 21% yearly.

User Training: Detailed training is necessary for the users. Ultimately, user is going to use this software. If they not understand properly they may do mistakes. Department wise full training is necessary for all users.

These risk factors are the main causes of ERP failure. If implemented successfully, it align business objectives with technology solutions. It evolves in the organizational value chain by enhancing customer satisfaction and stake holder commitment. It achieves better organization resources.

Related Books
Implementing SAP ERP Sales & Distribution
Implementing SAP Sales and Distribution
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Your Hands-On Guide to SAP Sales & Distribution Written by senior SAP consultant Glynn Williams, Implementing SAP Sales Distribution is packed with tested, time-saving tips and advice.

 Read Related Articles

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