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7 Key Risk Areas During Optimization Of ERP Implementation

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Businesses that use Enterprise Resource Planning, or ERP, are usually in a better position to manage all their critical operations under one platform. Often, the businesses will require optimizing the ERP if they have to make an impact on the operations. However, this optimization effort may draw other risks which limit the productivity of the business. Business solution experts advise that it is prudent to understand the possible risks and how to avoid them (for more details on how to tackle these business challenges, visit https://twbs.com).

In this article, we will discuss the seven common possible risks which make almost 75 percent of businesses fail in their efforts to optimize their ERP implementation:

Project governance.

Companies which don’t pay close attention to all ERP implementation factors may end up getting less than what the contract says. Therefore, it is prudent to take charge of the project timeline and budget. They also need to get involved in all implementation activities. This avoids delays and over expenditures or getting fewer services than agreed upon.

Business requirements.

Understanding the business requirements regarding the optimized ERP can only be possible if the company drafts the business requirements and tests them using the new upgraded ERP. It is only at this stage that the business can prevent several risks that can result if not well tested.

Regulatory needs, controls, and security.

The Payment Card Industry, Sarbanes–Oxley Act (SOX), and any other applicable regulatory requirements play a great role in the implementation of ERP. Additionally, the data privacy guidelines are a mandatory consideration to be made. Security of data is probably the most crucial, since the ERP uses Internet platforms. Some of the concerns include the cyber security as well as privacy and integrity. The company must scope and plan well to meet any regulatory controls and security needs after the system is live.

The data.

Data-related concerns include planned classification, data cleansing, mapping and moving processes. There should be no risk which will affect productivity even after the upgrades. All data must be matched with the right department, owner, date, and any other crucial parameter.

Organizational change management.

Imagine staff and everyone waking up to a new or upgraded ERP system and no one spoke a word about it. Well, the company must make plans for critical communication before and after implementation to all concerned parties including the stakeholders. In fact, training the staff on how to use the new version of the ERP is not optional but a must. Failure to do so will only result in unnecessary anxiety, rumors and will cause conflict as staff try to figure out on how to go about using the new ERP.

Operations.

As soon as the ERP goes live, the company is bound to face various emerging issues. Also, the service and solution providers that installed the system will need to be reviewed for adequacy. Other emerging issues include backup strategy and owners who are assigned to use the system. Assessing the business priorities against the system’s functionality is also paramount. All these will ensure that the system addresses the operational needs properly.

The technology.

A good ERP is the one which is designed to meet all needs of the company at the moment, and can accommodate any future advancements in technology. This includes the infrastructure needs. Again, this can entail frequent updates on software upgrades and data recovery processes.

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