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Mitigating ERP Implementation Risks – how should customers address data security and user adoption challenges?

Todd Kuhns Profile picture for user Todd Kuhns August 9, 2022
Summary:
It’s important for business leaders to understand what ERP implementation challenges look like. Todd Kuhns of Acumatica explores three stumbling blocks and how they can be mitigated.

Responsive ERP implementation vector connected cloud migration concept © madpixblue - Shutterstock
(© madpixblue - Shutterstock)

Today’s enterprise landscape is pushing businesses to adopt modern, cloud-based business management solutions to help them meet current demands. The number of organizations moving to the cloud has grown immensely in recent years, and cloud-based computing continues to be a high-growth segment of IT spend.

The cloud has significant business advantages, including hardware cost savings, reduced manual effort, no software maintenance, a single source of truth, and increased scalability and performance of applications.

However, despite these advantages, implementing a cloud-based business management system (e.g., ERP) can be daunting. After all, migrating users is a highly visible project that can bring significant complexity and time constraints.

Companies can find it difficult to deal with the challenges an ERP implementation might bring, especially if they do not have an implementation partner on their side.

Challenges of an ERP implementation

There are several challenges organizations might face when undertaking an ERP implementation, including employee resistance, project delays, unexpected costs, navigating data migration, etc. As such, some business executives might feel apprehensive about the ERP implementation process, including concerns about the initial investment, complexity of implementation, internal resource constraints and employee training.

It’s important for business leaders to understand what implementation challenges look like, and how they can mitigate those stumbling blocks.

Challenge number one – employee resistance

Change is never easy; it shouldn’t be surprising if your employees are reluctant about transitioning to a new business management system. For an ERP implementation to get off the ground, organizations need approval and championing from leadership and IT teams, as well as support from the team members who will be using the new cloud ERP software. For employees, the disruption to their daily activities and workflows must be mitigated by the ERP system’s expected ease of use, flexibility, and increased efficiency. Communicate the plan to your employees early, provide regular updates, give them time to digest the situation and request feedback on functionalities and capabilities they would like from the cloud ERP software. During implementation, invest in training employees so they feel like experts on the new system.

There are some people who prefer sticking with the tried and true no matter how well you communicate the benefits of a new system. Remind employees of the pain points that will be resolved, the time that will be saved, and ask for regular feedback during the implementation process.

Challenge number two – unexpected delays and associated costs

Alongside employee resistance may come other challenges, such as time delays and unexpected costs. Gartner cites six ways cloud migration costs can go off the rails. According to Gartner, the most critical phase in a cloud migration project is application assessment. Failing to fully assess business processes prior to migration can result in an incomplete requirements document and downstream scope creep – sometimes to the tune of over $100 million. A rushed application assessment can also lead to dependency bottlenecks. By failing to discover and account for the interdependencies between on-premises systems, businesses might incorrectly group and order application migrations, creating delays, and increase costs. For instance, Acumatica customers SEACOM and Incubeta were able to successfully migrate their data because they strategically and patiently assessed business processes before fully committing.

It’s vital for migration teams to collaborate with their ERP providers to assess what applications and dependences need to be moved to the cloud. Doing so will help ensure an accurate cost representation, mitigate scope creep, and increased success rate.

Challenge number three – data security and risk management

Every organization has sensitive data, which might make decision makers wary of moving to the cloud. Moving data to the cloud can introduce security concerns such as compliance violations, contractual breaches, unsecured APIs, misconfigured servers, malware, unintentional errors, etc. To combat security risks, businesses must assess essential data and core services, to decide what security practices to implement. They must do their due diligence to understand the cloud provider’s security practices, where data will be stored and encrypted, and what regulations the provider is compliant. Many cloud providers offer pre-built security features to help their customers with data security. In addition, providers and implementation partners can collaborate with businesses to ensure security and risk management needs are met.

Ultimately, cloud migration can reduce certain infrastructure security risks associated with legacy, on-premises IT environments. Encryption, logging, private networking, monitoring, distributed denial-of-service protections, automated patches, and other elements are often built into cloud environments to reduce security risks.

The value of a cloud migration partner

Businesses often underestimate the effort to properly plan and execute a cloud migration. Consequently, leadership and IT teams may set schedules and budgets that are too tight and run the risk of their projects taking longer than initially expected and breaking the bank. That’s why an experienced partner is vital.

Acumatica customer Design Studio struggled with upgrading its legacy HR software and homegrown ERP. The staff was having to manually enter data into spreadsheets to complete regular accounting tasks. The team needed a robust manufacturing solution to increase efficiency and streamline processes. Acumatica provided a solution that improved data visibility, stored data in a single platform, and improved workflows and user access.

Knowing of other company ERP implementations that took two to three years, Design Studio’s head of IT and business analysis, Harini Perera, was impressed with how quickly the team deployed Acumatica.  They said:

It was a quick transition, taking just six months. It was great working with our Acumatica Partner Propylon One who helped us transition from our bespoke ERP to Acumatica without any major issues.

The founders of Acumatica, for example, decided to sell and implement their cloud-based ERP solution through a network of progressive partners. This led to the company’s global network of Acumatica Value Added Resellers (VARs), who receive industry-leading training through the Acumatica Partner Program.

We match customers with a local VAR who knows their specific industry and market. Based on the scope of the project, the VAR partner will help develop an implementation plan. The plan will include details on reviewing business processes, data migrated, training, and user acceptance testing within the given timeline, scope and cost. A local partner supports the customer from ERP implementation to go-live and aids in growing the business and streamlining processes on our platform.

Devin Samayamanthri, chief of staff at Design Studio said:

Unlike the other ERP applications out there, Acumatica is super intuitive and user-centric, meaning you don’t need a mammoth team of ERP experts in-house to get the job done.

Migrating to a cloud-based ERP system does not have to be intimidating. With proper preparation and the help of migration experts, such as VARs, your company can surely combat employee resistance, time delays, budget constraints, security risks and other challenges.

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