Implementing a Proactive ERP Risk Management Strategy

  • 7 March 2018
  • CTND
Categories: ERP

Risk management design

So, your company is considering implementing an enterprise resource planning (ERP) system. By bringing all data and technology under a unified system, your organization can enjoy access to detailed information, reduced costs, and streamlined processes. It’s no question that the benefits of ERP far outweigh the risks.

Of course, risk can’t be completely eliminated. Companies that fail to implement a new software solution successfully may face employee pushback, incomplete training programs, and a lack of commitment to the project as a whole. These risks are significant.

With the right risk management strategy, you can significantly reduce your risks during ERP implementation. In this post, we’ll discuss the most common risks faced when implementing a new ERP and tips for overcoming them.

Risk Factor: Lack of Buy-In

While you already understand the benefits of switching to an ERP solution, your employees don’t necessarily have all the information you have, and they may not be fully convinced. You may find that staff members want to stick to the old processes and legacy applications they’re used to. Even if the majority of the team seems cooperative, don’t underestimate the influence of a single worker who won’t get on board: one “stick in the mud” can bring down an entire team’s morale.

Risk Management Tip

Make sure you outline the worth of the ERP system to your employees. Explain the need for the system, perhaps in the context of existing pain points and challenges within your business or industry. Make the project personal by explaining how they will directly benefit from its implementation. Finally, show your own enthusiasm for the rollout. Employees may grow skeptical of a project if their own leadership isn’t psyched about.

Risk Factor: Improper Training

Even if your employees buy into the new ERP system, that enthusiasm will quickly fade without proper training. They will grow frustrated and resent the technology if they don’t know how to use it properly. This will result in an ERP system that’s underutilized and doesn’t benefit your company in the way it was intended. Furthermore, leadership risks isolating their employees, as may they feel that the lack of training was a result of oversight or lack of faith in them.

Risk Management Tip

Make training a top priority. Ensure your organization has a proper rollout and training plan in place before notifying employees of the change. Sometimes, companies may even stop their ERP implementation mid-way, leaving workers confused and struggling to use a mix of legacy and new applications. Create a plan and follow through on your implementation from beginning to end. Use a variety of training techniques to suit the learning styles of all your employees.

Risk Factor: Lack of Control Over Training

Depending on the size of your organization, it may become difficult to ensure each employee receives the proper training. They may have questions related to their specific position which aren’t covered in more general training sessions. They may not have questions about the ERP until after they’ve started using it. Yet it’s only in the specifics of the employees’ jobs that the company can reap the benefits of streamlined processes and communication.

Risk Management Tip

Take advantage of organizational change management to have a team of ERP experts create the strategy for your organizational training and act as resources for your employees. You may also designate one staff member for every department or team, who will act as the champion (a.k.a. “power user”) to support their peers in learning to use the new system. Managers and leadership can also turn to these team champions to get a sense of how workers are adapting to the new system, and whether there are any gaps in training so far.

Risk Factor: Lack of Documentation

Your risks aren’t entirely eliminated upon the completion of training. Workers will always have questions and will likely need to revisit certain processes, especially in the beginning as they’re still adjusting to the new system. Without documentation, employees may find their “own” ways to do their daily tasks. This can lead to inefficiencies and confusion when communicating with fellow workers or onboarding new ones.

Risk Management Tip

Document everything covered in training. This should include training materials provided by your ERP company and all other processes worked out during implementation. You can also turn to your team champions to help document department-specific processes and notes made by workers. Fortunately, your new ERP system will make it easy to store all of this documentation in one accessible place, so new hires and experienced staff members alike can easily search for and find information on company processes.

Implementing ERP is a Long-Term Commitment

Your workers aren’t the only people who need to be patient during the early months of using a new ERP system. With such a large undertaking, who wouldn’t want to see a return on investment as soon as possible? Remember that implementation can take months to complete, but the hours you spend getting it right the first time will lead to greater benefits and a lower chance of issues down the road.

Employees will need time to get into a groove with the new ERP. Suppliers and partners will need time to adjust to the new protocol when dealing with your company. The key is to create a long-term plan for implementation and training, and then follow through on it, to minimize risks as much as possible. With a sufficient risk management strategy, you can anticipate and plan for potential obstacles, and keep your company on track toward enjoying the benefits of ERP sooner.

If you want to learn more about risk management and planning your ERP implementation, contact us today. Cre8tive Technology & Design offers ERP implementation, training, and organizational change management, all catered to meet your manufacturing company’s specific needs.

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