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Organizational Conflicts in Implementing New Manufacturing ERP Systems

Angry CFO

In this White Paper, Peter and Eric Green describe how inherent organizational conflicts can cause the implementation of a new manufacturing ERP system to fail in its goal of improving the production processes which are at the heart of most manufacturing enterprises.

Legend has it that here are no scarier words for a production manager in a manufacturing plant than when the CFO says "I just bought you a new ERP system to help with your production operations".

According to Gartner Research, up to 75% of ERP implementations fail to meet expectations and 17% fail outright. In this White Paper, we look at why many manufacturing ERP implementations fail to come close to meeting their original objectives, especially in the area of improving manufacturing operations.

The premise of implementing an ERP system is that it will provide a single system which will meet all of the information technology requirements of an organization provided that the organization is willing to reengineer its operations to be compatible with the methods used by the ERP system.

Most ERP systems are sold on the basis that, by adopting the methodology embodied in the ERP system, the organization will dramatically improve its operating efficiency and thus justify the large cost of implementing the ERP system.

A fundamental premise of most ERP implementations is that the organization will change its operations to meet the requirements of the ERP system, which is where the fatal flaw often lies.

While accounting follows standard practices across a wide range of manufacturing organizations, their products, the methods used in production, and the organizational processes they use vary widely from one manufacturing organization to another, as these form the basis of their competitive differentiation.

As a result most ERP implementations are successful in accounting/finance but fail completely when it comes to integrating existing manufacturing processes.

To learn more about these issues please read "Organizational Conflicts in Implementing New Manufacturing ERP Systems ".

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