Business ERP implementation failures due to 6 reasons in Vietnam

ERP implementations fail for a variety of reasons, including excessive costs and a lack of results after implementation. However, these are not the primary reasons for the failure of the digital transformation with ERP. So, what’s the big deal? Learn more in the article below

For medium-sized businesses and above, management almost always intends to build a professional management system like ERP, but the majority of them make the following mistakes:

1. Unclear and inconsistent goals when implementing ERP

What is ERP?
Unclear implementation goals are the cause of business failure – Source: LinkedIn

The lack of a clear governance orientation does not meet the desire to deploy ERP to expand the business’s size. Furthermore, businesses do not take the time to fully understand the values and challenges of implementing ERP systems, which leads to the problems that businesses frequently face, such as:

  • Departments are unable to develop a comprehensive process; instead, a loose and methodical management chain exists. As a result, the standardization system could not be met from the proposal stage to the leadership and implementation partners.
  • Enterprises cannot accurately advise partners on future development plans based on human resources, departmental management, organizational structure, and other resources.

Lack of consistency, in particular, is a major contributor to ERP implementation failure. For example, management may want to use ERP to manage the business, but employees may object due to the system’s complexity and difficulty in use. As a result, managers abandon this digital transformation from the start. Employees will undoubtedly be confused during the transformation process, but professional management systems require time for businesses to adapt to changes and maximize benefits. At the same time, ERP is only effective when a standard process is followed. This necessitates the involvement of all departments, so the problem that is difficult to control and difficult to correct when mistakes occur is also a source of employee dissatisfaction.

2. Lack of structured management

ERP always requires a commitment to close management from the business side, from all levels of leadership to department heads and employees, in all projects. The digital transformation process will fail if the business side does not have a dedicated team to coordinate with the ERP solution provider to represent the business and support the ERP operation.

For example, during the ERP implementation stage, management is not directly involved in learning how the system works, or human resources are insufficient to manage all processes. This costs businesses a lot of time and money, and if it is not stopped, it will result in resource loss.

To implement a successful ERP project, enterprise resources must clearly divide tasks and closely monitor progress. As a result, the communication and workflow processes will run smoothly.

3. The deployment team lacks expertise

The factor of selecting a project implementation partner accounts for more than 50% of project success. No matter how good the system is, it will fail unexpectedly if combined with an inexperienced team.

The key role of partners in each ERP project is to analyze, evaluate, and thoroughly understand the business structure before planning the implementation for each stage. Naturally, the cost of working with a professional team will be proportional to the capacity profile and implementation experience. The elderly have their own money, and the money you spend will be worth it if you work with a reputable team. BEMO is an excellent choice for consulting with the most comprehensive team of consultants, assisting in the development of successful projects.

4. Lack of communication and connection

Why ERP fail in Vietnam companies?
Lack of communication and connection – Source: Blog in

Coordination between the implementation team and the enterprise project team is critical during the ERP implementation process, and it can be said to play a key role in determining the project’s success. Consider this: if information only comes from one side of a project, it will result in communication errors, incomplete information capture, and difficult-to-manage problems.

As a result, businesses that want to implement ERP must constantly connect and communicate with system experts in order to understand how the system works and to promptly update and innovate.

5. The ERP process is unclear

The difference between success and failure in ERP implementation is that businesses must be consistent in their transition from paper to digital technology. If the enterprise wants to change the original process discussed too much after the project has begun, it will result in costly human resources, time, and difficulties for the deployment team.

Furthermore, when the business undergoes too many changes in the operating process, the complexity grows, and the ERP solution may eventually become ineffective.

6. No budget plan

Managers should have an estimated budget based on the needs of the business before beginning to build an ERP system. This will also assist the implementation specialist in providing accurate advice, financial planning, and project completion time.

When there is no clear budget, businesses should calculate and estimate costs by contacting and discussing details with implementation partners.

The following are six reasons that we believe businesses should consider when implementing ERP. However, in order to select the best solution, you should consider the advantages of ERP. I hope you found this article to be informative. Please keep an eye on the BEMO page for new articles, and if you have any questions, please contact us right here.