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ERP implementation leasing issues

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Pain points and difficulties usually encountered in ERP implementation projects in the Leasing industry. More info at www.charisma.ro

Pain points and difficulties usually encountered in ERP implementation projects in the Leasing industry. More info at www.charisma.ro

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  • 1. Web sources: totalsoft.ro; charisma.ro; acollada.comDifficulties or pain points usually encountered in ERPimplementation projects in leasing industryinvestments in ERP projects are significant from hardware and software implementation to supportservices. If deadlines slip or the ERP system does not function as intended, it can quickly derail businessdecision-making, productivity and profitability.Leasing companies are often under great pressure to complete ERP projects based on tight schedulesand budgets, so missteps often occur. This can lead to costly problems during the implementationprocess, which can persist long after go-live.We present below some of the problems that the leasing industry companies usually have, problemswhich can be solved by a proper implementation of software: End-to-end, multi-currency, multi-language, multi-country application; Fully integrated system with all activities in the same database without transfer; Achievement of all activities required in a lease or finance company; Contract change management, with fully preserving history; High configurability for managing customer-specific requirements; Parallel accounting systems, multiple, adaptable to any country.From our experience, the critical pain points for ERP implementations in the Leasing sector are:ERP software misfitDue to poor ERP selection and evaluation process, ERP software can be found to be ill-fitting with thebusiness requirements. For instance, if the ERP software is not in compliance with the legislativeenvironment, the leasing companies will not be able to provide its users activities with the right legalframework.High turnover rate of project team membersIf the project team members suffer from high work stress and workload when coping with theimplementation, some member teams may resign from their job, which means insufficient ERPknowledge and skill transfer among project teams during the ERP implementation life cycle. In the end,users and project team members will have insufficient ERP knowledge for performing their daily taskswhen using the ERP system.Over-reliance on heavy customizationDue to software mismatch, heavy customization will be required in the areas of program
  • 2. Web sources: totalsoft.ro; charisma.ro; acollada.comcustomization and report customization. Customization could cause project delays, overspent budgetand an unreliable system (due to poor quality of customization, unresolved system bugs and insufficienttesting). Customizing the ERP to fit with specific leasing business processes might lead to sacrificing"best practices" embedded in the ERP system.Poor consultant effectivenessSome of the consultants can be considered to be inexperienced with ERP systems and unable to providea professional level of advice on EPR project planning.Consultants that communicate ineffectively during the project phase and just suggest workaroundswithout applying professional skills to conduct BPR (Business Process Reengineering) to bridge the gapbetween ERP systems and business processes are considered inefficient.Poor IT infrastructureIf the top management has insufficient financial resource provided for the implementation process, thena low performance IT infrastructure hardware will be proposed by the consultants and project manager(so as) to reduce the costs of ERP implementation. The poor IT infrastructure will most probably lead toa slow processing capability of the ERP system.Poor knowledge transferInexperienced consultants that are not aware about the specificity of the leasing industry and try topractice during training sessions will not deliver professional ERP training to the users. Also, if thetraining material is not written properly, all the information will be found to be too brief and unhelpful.Poor project management effectivenessIf there is limited ERP knowledge, capability and poor project management skills, the ERP project will beconsidered to be challenging and demanding, as it involves managing systems, people (project team,users and external consultant) as well as re-designing business processes. It is important for the projectmanager to effectively manage the consultants, for example, in evaluating their communication andtraining performance, when conducting BPR (Business Process Reengineering), and when testing thesystem performance.Poor quality of Business Process Reengineering (BPR)It is also possible that some of the project team members to have an unclear vision of
  • 3. Web sources: totalsoft.ro; charisma.ro; acollada.comwhy or how to conduct BPR because their consultants provided unprofessional advice for conductingBPR. It will be difficult for project team members to collaborate and contribute to BPR, and the poorquality of BPR will lead to incorrect system configuration problems. If the business processes are notsuccessfully reengineered to fit with the ERP systems, and the project teams are not ready for theadaptation of new business processes, they will not have the mindset for implementing or using the ERPsystem.Moreover, during the BPR process, if the consultants will not conduct mapping analysis to map thesoftware functionalities with business requirements, this will lead to a mismatch between ERP andbusiness processes.Poor quality of testingAn over-tight project schedule and an insufficient knowledge in testing ERP systems, will conduct in arush and low quality. The ERP testing result is an indicator for revealing the readiness of the ERP systemto “go live” (from the perspectives of examining IT infrastructure capacity, correct configuration of ERPsystem, if people - including users and project team - were equipped with sufficient knowledge andskills, and data was of good quality).Poor top management supportTop management is expected to provide support in the areas of committing to the ERP project,sufficient financial and human resource, and the resolution of political problems if necessary. Limitedfinancial support will contribute to a rushed ERP implementation process, project team members will beoverloaded and high staff turnover rate, ineffective knowledge transfer, and political problems willoccurred. Insufficient commitment will lead to political problems which will hinder the implementationprocess (causing poor BPR, widespread user resistance to change and low user satisfaction).Too tight project scheduleIf the top management and the project manager will like to reduce the budget of the ERP project andthey will set the project schedule too tight, the implementation activities will be conducted in a rush(e.g., project planning, BPR, training, testing and so on) in order to meet the project deadline. Theproject team and users will overload the system.
  • 4. Web sources: totalsoft.ro; charisma.ro; acollada.comUnclear concept of the nature and use of ERP system from the users’perspectiveDue to poor quality of training and insufficient education delivered by the top management and projectteam, users will not have a given clear idea of the nature and use of the ERP system. Conclusions: theywill not understand the rationale for implementing the ERP system or the process of implementationand they will not be prepared for the implementation, they will take resistance to change, which willlead to political problems, poor quality of BPR and a resistance to using the system.Unrealistic expectations from top management concerning the ERPSystemIf top management will assume that the ERP implementation will provide great solutions withoutconsidering the complexity of the ERP system, this will lead to possible implementation processcomplications and associated risks. This gave the whole project team and users unrealistic expectations.This misconception will lead to superficial project planning and an underestimation of budget andresource allocation, and will result in failure of ERP implementation from a project managementperspective.