Picture the accounting manager of a mid-sized manufacturing company. The firm spends months researching and finally purchases an ERP (enterprise resource planning) system. Installation is complete. But six months later, employees are still writing in paper ledgers and the program sits almost untouched on their screens. This is not an unusual story. The problem is rarely the software. The problem is how the software is put into practice.
ERP systems bring together many business functions into one place — inventory tracking, accounting, purchasing, sales. But these programs do not run themselves. Without a properly built process behind them and people who actually use them, even the most expensive software accomplishes nothing. Think of it like a professional oven. If you do not know what to put inside it, and nobody wants to press the button, no bread comes out of it.
The first condition for success is management ownership. If the business owner or general manager does not personally follow the project, nobody below them takes it seriously. When the accountant says ‘the program is too complicated’ and senior management waves it off with ‘never mind then,’ the project dies quietly. Management ownership means the boss also opens the program, the boss also asks for reports from it, and the boss does not allow old habits to creep back in. Without this, the project lives on paper only.
The second condition is clean, accurate data. If you put wrong information into an ERP system, wrong information comes out. In computing circles this is called ‘garbage in, garbage out.’ Are the product codes on your stock cards mixed up? Then your inventory report comes out mixed up too. Are customer account balances entered incompletely? Then payment tracking breaks down. Before going live, the existing data must be cleaned, corrected, and brought into a standard format. This work is tedious and takes time. But skipping it is like moving your rubbish into a brand new house.
The third condition is real user training. Buying a program and dropping it in front of employees is not enough. If the billing clerk does not know how to enter an invoice, and the warehouse staff cannot figure out how to record a stock movement, the system never runs properly. Training must go beyond ‘press this button.’ Employees need to understand why each step matters. Concrete links help: ‘If you skip this entry, the end-of-month stock count will not balance.’ Training also cannot be given once and forgotten. During the first weeks, someone must be available nearby to answer questions as they come up.
The fourth condition — and the one most often overlooked — is process clarity. An ERP system organises the way work gets done. But the way work gets done must be clear before the system arrives. Who takes an order? Who approves it? Who checks the warehouse? If there are no agreed answers to these questions, or if everyone does things differently, the program does not automatically fix that confusion. In fact, it often makes the confusion more visible. Before the system goes live, it is essential to write down how each process works and who is responsible for what. This paperwork is just as important as the software installation itself.
A business that meets all four conditions improves its chances of a successful ERP project considerably: management ownership, clean and accurate data, genuine user training, and clearly defined processes. Going ahead without these conditions is like setting off on a road trip without reading the map. The car is there, the road is there, but nobody knows where they are going. If you run a small or medium-sized business and you are thinking about buying an ERP system, ask yourself one honest question: ‘After the software arrives, will I personally follow through on this?’ If the answer is ‘no’ or ‘maybe,’ solve that problem first. Because even the best system achieves nothing when nobody owns it.
This article was originally written in Turkish by Gökhan MERCANOĞLU on June 12, 2000 and has been automatically translated into English and other languages using machine translation.