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Common ERP implementation risks and how to mitigate them

Why would anyone use cloud ERP?

A service-based organization is only as productive as its people. Cloud ERP - thanks to its capacity to radically simplify and automate your workflows - represents a powerful tool for making your people more productive. While this should make moving to cloud ERP a no-brainer, many organizations are still reluctant to make the jump, adopting an “if it ain’t broke, don’t fix it” attitude. 

Technology and business decision-makers tend to take a risk-averse approach to moving their ERP to the cloud. But we know from experience that organizations who migrate their ERP to the cloud consistently reap major benefits from doing so - benefits, which significantly outweigh the risks and challenges of the actual migration.

The cause of this misconception actually stems from the challenges older, non-cloud ERPs present the organizations still using them. The brief is simply that migrating to the cloud would simply add another level of complexity to an already cumbersome solution.

The reality is a cloud ERP isn’t simply your existing solution in the cloud. Most on-premises solutions are too old and too bespoke to simply be moved to the cloud. But this only adds to the perception of difficulty.

This is because ruling out a simple ‘lift and shift’ and needing to replace their entire solution just to move to the cloud seems like a lot of work and even more expense for little return.

ERP risks - more a reality misalignment than a risk management issue

For those who had migrated, the challenges they expected never materialized. Interestingly, some research we conducted with Computing Research in 2020 revealed that the gap between expectation and reality was marginal for this group, but significantly larger for those who had not migrated.

This suggests that for hesitant organizations, concerns about migrating to a cloud ERP are out of alignment with the reality of migrating. Meaning the people finding cloud ERP implementation most challenging are those not doing it. This obviously presents a big problem for them in the form of a self-fulfilling prophecy. The harder you think a cloud migration is going to be, the more complex you believe ERP risk management in implementation is going to be, and the less likely you will be to make the move.

The scale and nature of the misunderstanding is best illustrated by the issue of security, data sovereignty, and compliance - many organizations still believe that cloud platforms are inherently less secure - despite a decade of maturation and innovation making public cloud platforms like Microsoft Azure some of the most advanced software solutions on the planet in terms of their threat and penetration testing, encryption, and policies.

Cognitive dissonance of this kind continues to hold many organizations back.

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Common concerns in risk management in ERP implementation

1.Project management and planning

The question of how to tackle the implementation - along with considerations like who should be doing the work, how it should be segmented, and reasonable deadlines and milestones - are all key ERP implementations are multi-phase projects and need to be planned and scoped well in advance in order to ensure a smooth transition and to attract buy in and cooperation from the huge list of stakeholders who will likely need to be involved.

The main risk here emerges from the project being delayed by different teams juggling their ERP implementation project responsibilities with their other priorities - and from misjudgments in the time and budget required to successfully complete the project (particularly if scope creep rears its ugly head.)

Unit4 builds systems specifically with the needs of service-centric organizations in mind and we’ve brought this experience to bear to create a base of knowledge and expertise that helps make implementations as smooth as possible for your entire organization. Our tailored Industry Models for implementation are designed to provide you with the industry-specific capabilities you need to get your new system up and running with minimal disruptions - in fact, it has been known to halve the typical length of an implementation project, reducing project management and planning burdens, helping to prevent cost overruns, and making the process of change easier to manage.

2.Change management risk

The way you approach change management can represent a huge risk to the success of your implementation and your ongoing operations. Change of any kind has an impact on the way people do their jobs - it can be stressful, confusing, and in some cases, it can undermine performance. Approaches to the way changes affect your people must therefore be handled with compassion and patience to support positive outcomes.

Change projects are fundamentally learning projects, and learning takes time - everyone will have to follow a learning curve as your organization gets to grips with a new system. Change management discipline is particularly important to ERP projects because they are not “one and done” events, over as soon as the new system is up and running. Cloud ERP in particular is built on the assumption that it will continue to evolve to support the business as it evolves and incorporates new technologies. 

Unit4 helps you manage the challenges of change management with dedicated support teams that continue to work with your organization even after your implementation is complete, which incidentally allows you to leverage another of the cloud’s biggest advantages - removing the burden of system upkeep and performance from your own teams so they can focus on adding strategic value. 

3.Data integration, quality management, and accessibility

One of the most commonly cited apprehensions when it comes to cloud ERP migration is around the issue of data sovereignty. While cloud represents the only viable path to full data integration and visibility, it does represent a step-change in the ways in which your organization accesses and works with its ERP database. 

Because a cloud vendor is responsible for the overall performance and security of the solution, direct database access is generally only possible with an audit trail (to ensure compliance) and with some level of support and authorization from the vendor. However, this actually helps to minimize one of the biggest latent risks in ERP operation and migration: the loss or mismanagement of business data - something which can represent both a legal compliance risk and a direct financial risk in the age of GDPR and other punitive regulatory frameworks.

Unit4 eliminates these risks by providing a unified approach to compliance standardization and a solution that permits a unified view of all data in your system - regardless of its input source. Helping your business make decisions more quickly and effectively and ensuring that everyone who uses the solution is doing so in a way that’s pre-approved by both your organization and ours, and which is compliant with all relevant regulations. Allowing them to use the solution with confidence and with minimal disruption to their productivity.

How can Unit4 cloud ERP help you?

Unit4’s ERP software is at the heart of better work and workplaces, freeing your people to focus on what matters: their success and yours.

Our solutions live in the cloud and elevate your business, delivering visibility and control over all aspects of finance, projects, procurement, reporting, forecasting, and payroll.

To find out more about what our solutions can do for your organization, click here to check out our dedicated product pages or click here to talk to our sales team.

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