Business consulting

ERP investment risk factors

Thamonwan Chuenchit Thamonwan Chuenchit

Many organisations have placed tremendous efforts in implementing a new ERP system or improving their current system. They correctly believed that the ERP system would bring lots of advantages to their organisation, such as process efficiency improvements, benefits of a single database, and data analytics capabilities for corporate strategy. However, many of these organisations failed to successfully implement their ERP system by underestimating the risks involved in each phase of the system development life cycle (SDLC), from software selection, planning, implementation, project closure, transition to operation, and operation to retirement.

It may be evaluated from the graph above that although there are several factors affecting your success in implementing an ERP system, there are three key elements that are most often identified as causes of an unsuccessful investment. These three crucial aspects discussed here are Project Management, Business Process Reengineering and Change Management, and thirdly, ERP Evaluation and Selection. Thus, it is key that organisations put more focus and effort on these three aspects in order to mitigate the risk of an unsuccessful ERP investment.