#1 Reason for Failed ERP Installation: Choosing the Wrong System
January 11, 2005 (Press Release) --
Enterprise Resource Planning (ERP) systems offer great benefits to engineer-to-order
(ETO) companies looking to increase productivity and decrease cost. These benefits are achieved as a result of a successful implementation, however not every implementation is successful. So why do they go wrong? After all, ERP is not a new technology; it has been around in various forms for over 20 years.
There are many reasons ERP implementations fail. Lack of management commitment, inadequate education and training, poor planning, not enough resources to name just a few, however the ETO Institute has determine the #1 reason for a failed ERP implementation: choosing the wrong system.
This problem was recently highlighted on the ERP-Select bulletin board, a vehicle to exchange information and ask for advice. A consultant was looking for an ERP system for a small ETO company that designs and builds custom equipment with low volume (10-15) units/year and an average lead time of seven months. The requirements as stated by the consultant clearly indicate that the company is engineer-to-order.
In this case the responses were less than helpful, in some cases misleading. Of the 15 products recommended only three really focused on ETO. One of those products while addressing the requirements was designed for the A&D market. The problem is that A&D specific requirements add unnecessary complexity for a commercial manufacturer. Five products were much better suited to make-to-order and one too big for this company. Now these vendors will claim that they have ETO customers but “One swallow does make a summer.” One was not even an ERP product. Another was for small job shops and five were not even close to ETO.
The ETO Institute specifically highlights some of the problems ETO manufacturers face when searching for an ERP system. The document explains some of the pitfalls and gives practical recommendations and tips to avoid making the mistake of selecting the wrong system. Go to www.etoinsititute.org and learn more.
(ETO) companies looking to increase productivity and decrease cost. These benefits are achieved as a result of a successful implementation, however not every implementation is successful. So why do they go wrong? After all, ERP is not a new technology; it has been around in various forms for over 20 years.
There are many reasons ERP implementations fail. Lack of management commitment, inadequate education and training, poor planning, not enough resources to name just a few, however the ETO Institute has determine the #1 reason for a failed ERP implementation: choosing the wrong system.
This problem was recently highlighted on the ERP-Select bulletin board, a vehicle to exchange information and ask for advice. A consultant was looking for an ERP system for a small ETO company that designs and builds custom equipment with low volume (10-15) units/year and an average lead time of seven months. The requirements as stated by the consultant clearly indicate that the company is engineer-to-order.
In this case the responses were less than helpful, in some cases misleading. Of the 15 products recommended only three really focused on ETO. One of those products while addressing the requirements was designed for the A&D market. The problem is that A&D specific requirements add unnecessary complexity for a commercial manufacturer. Five products were much better suited to make-to-order and one too big for this company. Now these vendors will claim that they have ETO customers but “One swallow does make a summer.” One was not even an ERP product. Another was for small job shops and five were not even close to ETO.
The ETO Institute specifically highlights some of the problems ETO manufacturers face when searching for an ERP system. The document explains some of the pitfalls and gives practical recommendations and tips to avoid making the mistake of selecting the wrong system. Go to www.etoinsititute.org and learn more.
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