The saying “once bitten, twice shy” is meant to convey how discouraging a mistake can be. More specifically, if you try something new but do not succeed at it right away, you might end up never attempting it again because you feel that you would just encounter the same error. That fear is natural among ETO manufacturers. That’s why we’re exploring common ERP implementation mistakes.
When it comes to the implementation of enterprise resource planning systems, it almost seems like major mistakes are routine. To be expected. This, unfortunately, includes the common ERP implementation mistakes that cost the organization time and money. For example, a Panorama Consulting survey found that in 2015, 57% of all ERP projects overran their budgets. The same percentage took more time than expected to complete. for perspective, 56% of implementations covered by this survey were on-site.
More than a third of respondents reported that they did not know if their implementations were ultimately successful. This, we’ve learned, is a sign that business case justifications and audits were not sufficiently thorough. Fears of a security breach or data loss were the top two reasons that survey takers cited for not pursuing cloud ERP. That could potentially incur more costs and delays, especially for Engineer To Order manufacturers.
With these numbers in mind, it is no surprise that for many custom design manufacturers, purchasing and implementing ERP systems can be scary.
What are the common ERP implementation mistakes that ETO manufacturers make?
ERP platforms are inherently complicated. They are the centerpieces of their respective organizations, tasked with connecting accounting software, customer relationship management tools and much more to each other. From the assembly line to the inventory system, ERP is the common thread. Yet this prevalence and complexity create many opportunities for error, including:
1) Too much customization
When an ERP solution isn’t a natural fit for an organization, it needs heavy customization to close the gap. You wouldn’t guess this is one of the top common ERP implementation mistakes, but such tweaking can delay project completion. This ends up increasing overall costs. The Panorama report revealed that moderate customization, in the range of 11%-20% was the sweet spot for ERP users.
2) Not enough quality data
An ERP platform is a system of record. As such, it should be a dependable way to obtain information about all aspects of the business, from sales right through to shipping. Many traditional ERP systems are difficult to audit, leaving everyone in the dark about key areas of concern such as the status of procured materials. Ideally, an ERP solution would instead offer real-time updates about how newly logged hours and placed orders affect job costing estimates.
3) Underestimating project scope
When it comes to common erp implementation mistakes, this one is a biggie. It’s seen across industries but especially among young ETO manufacturers. It’s particularly common for organizations that have never upgraded their ERP systems. They discover the need to interconnect all their applications, the timeline for completion inevitably starts slipping further into the future. Plus, the continued presence of bad data can jeopardize any benefits from the upgrade. It is important to set up a reliable ERP system that is properly integrated. Accounting, CRM, and productivity tools need to be aligned to prevent errors and issues in the long run.
An ERP system by and for custom design manufacturers
Total ETO is a breakthrough ERP | MRP solution for small and mid sized custom design manufacturers. It’s tailored for Engineer To Order manufacturers, so it fits without the need for costly customizations. That’s one of the major causes of scope overrun and delayed implementations. Total ETO is also super easy to upgrade. Most upgrades can be completed in just a few minutes! Data is always easy to access in real-time and configuration options that make it a highly affordable choice. Learn more about Total ETO by requesting a demo today!