An ineffective ERP implementation carries risks. Can outsourcing help you resolve them?
- An ineffective ERP implementation puts your organization at risk for disrupted operations, inaccurate reporting and financial losses.
- Adding 6-12 months of outsourced accounting and project management services to your ERP implementation can significantly improve your results by minimizing disruption and helping your team get more value from your new system.
- Ask your ERP implementation provider about outsourced support so you can more effectively implement and operate a new ERP.
A new enterprise resource planning (ERP) system can make your whole organization more impactful and efficient. But an ERP is also a major investment that carries significant financial and operational risks — if you don’t take full advantage of its capabilities.
That’s why more organizations are turning to outsourcing to make their ERP implementation processes more successful. Outsourcing support during implementation typically lasts for only 6-12 months, but it can help your team learn how to use your new ERP much more effectively.
Keep reading to learn more.
What are the risks of a poor or ineffective ERP implementation?
An ineffective ERP implementation can hurt your organization financially and make it harder to pursue your operational goals. Long-term, a poor outcome will also leave you paying for an ERP that you don’t use to its fullest extent.
Specific ERP implementation risks include:
- Data inaccuracy: An ERP that’s not properly set up won’t give you a clear picture of your finances and operations, which can lead to decisions being made based on bad information and inaccurate reporting.
- Rework: Correcting an ineffective implementation at some future date will likely involve redoing much of your initial legwork.
- Financial losses: A new ERP is typically a six-figure investment, but one that will be less likely to deliver ROI if it’s poorly implemented. Beyond that, your team will also work less efficiently and effectively, affecting your organizational performance and your bottom line.
- Disrupted operations: Without a fully functioning ERP, you may find yourself dependent on some of the same workarounds and slow manual processes that led you to invest in a new ERP in the first place.
- Customer dissatisfaction: Slower operations and a drawn-out implementation hamper your customer service, creating frustration and potential reputational risks.
These risks are all the result of an ERP implementation that doesn’t go as well as you’d like it to. What makes that happen?
Why do many organizations fall short on their ERP implementations?
A new ERP will often deliver significant ROI in the form of stronger processes and greater financial clarity. However, organizations that don’t know how to effectively implement an ERP can struggle to achieve those results.
Major blockers to a successful ERP implementation include:
- Low capacity: Implementing a new ERP takes a tremendous amount of time. If your internal team doesn’t have enough bandwidth to take that task on, you risk either falling behind on your implementation or watching your daily work suffer instead.
- Limited expertise: Your internal accounting or financial team is probably not loaded with experts in the latest ERP systems. This is normal — but can result in fundamental errors during an implementation that lead to ongoing problems with mapping or reporting.
- Bad data: A new ERP can give you dramatically more visibility over your finances and operations. But that only works if you’re feeding it good data, so if you don’t clean up your data beforehand, you risk a garbage-in, garbage-out scenario.
- Poor understanding: Beyond making setup mistakes, your team may simply not understand everything your new ERP can do. This means you could end up paying for meaningful features that never get used, wasting money and limiting your results.
- No point person: Without a dedicated project manager to keep things on track, your implementation effort will almost certainly fall behind. You also need someone keeping an eye on things from a change management perspective, or your team may simply not use the new system you’ve invested so much in.
However, smart use of outsourcing can substantially mitigate or even solve all of these risks.
How does outsourcing solve top ERP implementation risks?
To get the most value from your ERP implementation, you’ll often benefit from 6-12 months of outsourced accounting and outsourced project management. Depending on your specific organizational needs, this may include an outsourced CFO, an outsourced accounting team and one or more outsourced project managers.
Together, both services will typically make your implementation process go faster and smoother. You’ll also dramatically reduce your risk of paying for an ERP system you don’t fully use, increasing your ROI and your long-term organizational benefits.
Why use outsourced finance and accounting during an ERP implementation?
An outsourced finance and accounting team could include day-to-day accounting support and/or strategic financial leadership in the form of an outsourced CFO or controller. This team can help complement your in-house accounting team to avoid burnout and make sure your new ERP is fully implemented, with your team trained on all its features. You don’t know what you don’t know; so outsourced accounting can help you dodge a slow, ineffective ERP implementation that hobbles your organization for years to come.
Additional outsourced accounting benefits include:
- Ensure data integrity and accuracy: Quality-in, quality-out will give your decision makers clear, accurate financial and organizational data to work with.
- Adhere to internal controls: Avoid security or compliance problems later on by properly aligning your new ERP with your existing controls.
- Build out financial planning and analysis: Make smarter strategic decisions by using your new ERP to underpin more effective FP&A.
- Properly mapped financial reporting: Effective mapping means your reporting will be more accurate.
Why use outsourced project management during an ERP implementation?
An ERP implementation can take anywhere from several months to a year. Without dedicated project management support, it’s easy for that timeline to slip, adding months or longer to the process. A longer implementation won’t just delay the benefits of your new ERP system, but also risks your team feeling exhausted when you do finally have your ERP up and running.
Additional outsourced project management benefits include:
- Holistic oversight: With a dedicated project manager, key details won’t get lost in the shuffle.
- Insight into dependencies: You’ll better understand how all your systems and processes fit together.
- Optimized resource allocation: Avoid overburdening your team and wasting resources on inefficient time or workflow management.
- Consistent communication: Your outsourced project manager can also play a key communications role by updating your team about the implementation process and serving as a point of contact for stakeholders looking to weigh in.
How do you implement an ERP with outsourcing support?
To combine a new ERP with outsourcing support during the implementation process, ask your ERP implementation provider for help. Top-tier providers will typically offer outsourcing support as an additional service option.
Look for a provider that understands your specific industry, as industry-specific knowledge will help improve your implementation results.
How Wipfli can help
We help your organization become more efficient and effective by implementing a new ERP system. Let’s talk about your goals and whether additional services like outsourced finance and accounting would strengthen your outcomes. Start a conversation.
