Challenges of ERP implementation in Bangladesh

Business Analyst | 04 May, 2020 (Monday)View 2627

ERP projects are very expensive and challenging. If an ERP project is not managed properly, it will take longer than expected time, cost will be unexpectedly high and business will be in danger after implementation. In this article it will be discussed about the challenges of ERP implementation facing by Bangladeshi manufacturing companies.

Proper ERP project planning & budgeting

Without proper planning, ERP project cost will be hundred times more than the budget and project time line will be longer than expected time line since ERP project implies big change and covers many business processes, people, cultures & technologies. To make a proper planning & budgeting, a company must have to consider all business areas, people, required resources, current & upcoming obstacles, available technologies, software vendors & consultants etc. A proper plan of those can minimize the risk of failure. But most of the companies in Bangladesh fail to make a proper project plan & budget.

ERP project ownership by organization

Maximum Bangladeshi companies depend on software vendor and don’t take the ownership of projects and for that reason ERP failure rate is very high. But ERP success depends on the implementation strategies that must be taken by a company. Without taking project ownership, how a company will make strong strategies. Full project plan must have to be done by the company instead of depending on software company. If software vendors get the ownership, they will take you as a gold mine of money and make money more than thousands of times of your budget. Always remember that software vendors never ensure success but you can by taking ownership of the project.

Management alignment with ERP project goal

Majority percentage of Bangladeshi companies’ management don’t know about ERP. Most of them think that ERP is a software. So, buy it and implement in overnight. They are not aligned with project goal. But to success in ERP project implementation, all management level people must have to be aligned with project goal. They must need to know about the ERP, how it works, what can be achieved from it. They also need to contribute in ERP project. Because they are the internal customers of ERP in the company. In this case company have to arrange training on ERP to get alignment of management level people.

Organizational changes & setup for ERP preparation

ERP requires many changes in business processes, people & technologies. Also, company needs a new setup for ERP preparation. But in Bangladesh we see different scenarios. Companies buy ERP software and try to implement those without required changes & setup and at the end ERP software becomes a burden to them. But before implementing successful ERP, a company must need to perform all changes & setup on organizational structure, business processes & people. After ERP implementation, it is very costly & risky to change organizational structure & business setup.

Actual & complete business requirements identification and integration with software

Most of the Bangladeshi companies fail to get expected results from ERP implementation as their software don’t satisfy the business requirements. But Without integration of Business processes with ERP software, a company can’t get the expected result of ERP implementation. To get success in ERP implementation, a company must need to identify the actual business requirements and ensure that all those requirements are satisfied by ERP software.

Business friendly software selection

ERP software must be business friendly with company’s business processes. Otherwise, it needs to be made huge changes in software which required lots of customizations (change on program) and modifications on configuration (change software set up). For that company needs a huge money to make it. Therefore; a company should select a business compatible software. But in Bangladesh, most of the companies fail to select business friendly software.

Lack of skillful people for ERP

ERP requires lot of business analysis. To analyze business processes and integrate it with software, lots of analysis, thinking and brainstorming are required. For that it’s required smart people who can analyze any business process and integrate with software to ensure success. But in Bangladesh, those types of smart people are not available in all companies. Few companies develop those types of people.

People Barrier

ERP requires lots of changes in business processes & technologies. Organizational people must need to adopt those changes. Otherwise, ERP implementation will not be succeeded. But in Bangladesh, most of the companies’ people don’t want to accept changes in processes & technologies. Most of them are traditional mentalities & naysayers to changes. They have lots of excuses & complains on new things and create obstacles on improvements. If organizational people fail to absorb new changes, a company never be able to get success in ERP implementation. In this case, companies need to fire people or change their responsibilities and hire new smart people who can take changes.

External software consultants’ dependency

Maximum Bangladeshi companies depend on software consultants on ERP implementation. They think that software consultants can ensure success which is wrong. External consultants are very expensive and therefore they are hired for short time period (2-3 months). So, it’s not possible for them to understand all business scenarios, company’s cultures and people behaviors within that time. Therefore, most to the time they fail to integrate business process. At the end, ERP does not provide expected results.

Conclusion

To overcome all challenges & obstacles, each & every company should take the ownership of the project. It should a plan to control the software consultants instead of controlling by them. Companies need to choose ERP implementation strategy & business friendly software. Also need to invest on internal people to develop them and train management level people so that they can contribute on ERP implementation and can generate their requirements to get from ERP software.