Today’s ERP systems are completely different than how they were once designed. While the definition still stands for “Enterprise Resource Planning”, the actual resources an ERP system manages have drastically changed since the dot-com boom.

ERP used to be focused on financials due to the importance of inventory. It made perfect sense since, until the 1990s, the majority of organizations dealt with physical materials and expensive capital equipment. This equipment was at the heart of the product life-cycle with associated manufacturing processes that would determine how firms could compete. Therefore, the decisions on what to buy and sell came from Finance, Accounting or shared service teams. However, the types of businesses have changed in the past couple decades. Now a majority of organizations are in the Information or Service industry. Even those within manufacturing have “commoditized” the actual product development side of their business, and are run like service businesses. Now the most expensive cost is human capital and not raw materials. Hence areas that were once looked at as “nice-to-haves” have gained in importance since they have a more direct path toward an enterprise’s bottom line.

The change has left vendors such as PeopleSoft and Oracle racing to re-invent their core products to align with industry best practices. Newer ERP vendors, such as Workday, have become leaders not just because they leveraged a cloud-based infrastructure from the start, or that they can provide flexibility and configuration changes without the need for code updates, but because they can fit to an organization’s human capital needs rather than organizations modifying their business processes to work with their ERP system.

In addition, a more modular approach from savvy vendors now gives their clients alternative implementation paths that seem less daunting and capital intensive than a big-bang approach with all aspects of Financials and Human Capital Management installed on day one. Smart vendors go-ahead and bundle subscription packages to include services not in a client’s current implementation. They hope clients will (and do) ask themselves why they don’t implement the additional functionality if it is included in their licensing agreement anyway.

Like clockwork, ERP vendors present buyers with a utopian dream of maximum efficiencies with no need for external integrations that could slow down business processes, or consolidated reporting that can pull data from all organizations, and every functional area in both the Financials and Human Capital Management worlds.

Unfortunately, there are dozens of ERP pitfalls as you navigate through a new implementation. Some of these can turn the dream of an automated, efficient system into a nightmare that keeps going and going.

Here are just a few that trip up even the largest clients:

1.     Third Party Delays / Issues

The primary ERP vendor can tell you how great and automated their integrations will be, but they only control one side of the solution. The other side is almost never as motivated to help a client succeed as there is no accountability. They will have resources not contractually obligated to assist you or your firm’s vision. These people will not run on your schedule, and they probably have a hundred other clients of their own they are assisting as well. At best, your ERP vendor will tell you this in Appendix D or E as a risk, but will never fully explain that they can’t control these third parties