Cloud ERP Implementations: 5 Common Mistakes to Avoid

By Cindy Brinker

September 22, 2016

When CFOs and business leaders undertake a new cloud ERP implementation project, they seldom anticipate failure despite the risks associated with ERP projects.  A strategy to getting the desired benefits from the project is to follow ERP implementation best practices, and avoiding common mistakes is also a strategy of the transformation process. The following information highlights common mistakes that are made and how to avoid them to ensure the new technology delivers the complete benefit:

Mistake No. 1: Poor Planning with Low Executive Commitment
No matter what business leaders hope to achieve, reaching their goal will be all but impossible unless they have a proper plan, and implementing a cloud ERP solution is no exception to this rule. Up-front planning with a solid plan is absolutely necessary for your project to succeed. The up-front planning should include a thorough analysis of business processes and how to evolve with defined priorities.  The goal should be technical advancement rather than adjusting to the old ways of doing business to maximize business benefits and efficiencies.    

With all eyes on the CFO and leadership team, they must be committed and included in each phase of the implementation.  Designating a project champion or manager is a good strategy to strengthen the commitment for the new project, ensure creditability of the processes, and remove obstacles as change moves throughout the organization.

Mistake No. 2: Not Having the Right Project Team
When planning to implement any change, many CFOs focus their attention on getting executive approval, which is not enough. Before selecting and integrating a cloud ERP solution, a CFO must form a project team with resources from all areas of the organizations that have both technical and functional backgrounds.  Forming a project team with resources who take ownership and are actively engaged and involved in the decision making minimizes the possibility of derailment.  

When team members know what to expect in advance, they will be that much more willing to participate and put forth their best effort to make the project successful.  Ensuring that each team member understands the requirements, benefits and justification for the new solution will also work wonders when it comes to enhancing productivity.

Mistake No. 3: Underestimating the Importance of Key Design Components
The design of any cloud ERP software plays a direct role in the productivity of the team, and that factor must be taken into consideration before making the conversion.  For example, many ERP systems have pre-configured workflow processes, such as procure to pay, which can be easily adopted.  However, there are certain key components, such as the chart of accounts, which require allocated time to plan and design.

The chart of accounts and general ledger architecture is the foundation of an ERP financial management system.  A good example is Intacct’s revolutionary general ledger design.  Instead of using an old-fashioned account segments, Intacct uses dimension values that are tailored to your business, while simplifying your chart of accounts.  Designing a flexible and multi-dimensional account structure requires a comprehensive approach and should start before your cloud ERP project to take full advantage of an accelerated implementation.

Mistake No. 4: Lack of Investment in Training and Change Management
One of the most common reasons that cloud ERP projects fail is the lack of proper training.  Consequently, it can result in employees resenting the new system because they don't have a clear understanding of how to use it.  Training the employees should be done prior to, during and after the implementation to optimize end user knowledge and improve your chances of ERP success.  Conference room pilots should be held to:  1) demonstrate how the new software works based on the revised workflow processes, and 2) test the features and security of the system.
Certainly, one of the most challenging aspects of an implementation project is change management.  Business leaders know that people matter and having an aligned team with a strong project plan and frequent and open communication are keys to the success of the new technology.

Mistake No. 5: Not Vetting ERP Vendors
There are many cloud ERP vendors currently on the market, but not all of them were created equal. When trying to find an effective cloud ERP software to take their business to the next level, many CFOs will simply listen to a sales speech and jump to a new system, which can be a costly mistake. A vendor might have a great sales presentation, but a great presentation does not necessarily mean that their software will meet the needs of the growing business.

Business leaders and project teams should understand the requirements and need for a new system and test the system’s features and scalability for growth.  Before making a final decision, it's vital to analyze the potential vendor’s capabilities and ask them to provide at least three other business leader references, in the same industry, who are using the software. If a vendor does not have a proven reputation, then it is not worth the risk.
2016 Cloud ERP Buyer's GuideFinal Thoughts
It has been found that many companies are not satisfied with the delivered cloud ERP solution even if the implementation completes on time because of poor software selection and high expectations of the new system.  Following ERP implementation best practices is key to the success of the new technology and realizing the complete benefits and ROI.

About Cindy Brinker
Cindy Brinker, founder & CEO of Brinker+Co, is a leading provider of cloud-based accounting and financial management solutions. Headquartered at The InNEVation Center in Las Vegas, Nevada, Brinker+Co is strategically leveraging Intacct’s Cloud ERP solutions to drive significant value and greater agility and scalability for growing companies. For more information, please visit brinkerco.comLinkedInFacebook, Google+ or Twitter.

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