Dairy companies embracing new digital technologies can transform their milk supply chains and make collecting and moving milk easier. But what happens when the software selected and vendor implementation doesn’t go to plan? Introducing new software systems to your dairy operation always comes with risks. To mitigate these, you need to find a vendor with the right experience and expertise in the dairy industry. A correctly implemented ERP system can reduce operational costs by over 20%. On the other hand, up to 64% of ERP projects go over budget, and 30% take longer than expected, often resulting in the loss of millions of dollars and disruption to business operations.
We've all heard of buyer's remorse, that awful regret that sets in after a purchase, big or small. Often buyers go into a purchase excited and expecting the solution to achieve more than they hoped. Buyer's remorse sometimes sets in when that doesn't happen. This feeling causes us to evaluate our options; what if? To reduce the risk of you asking yourself that question, any decision should be well-researched and weighed against alternatives. You need to talk to clients of a potential vendor’s software solution and obtain candid feedback about their implementation experience.
What are the costs associated with an IT implementation failure?
When it comes to an implementation failure, it’s not always easy to figure out the actual cost and impact this has on a business. Many variables influence this, including the size of your business, the project, the resources involved, and the completion date. The costs of IT implementations go beyond time and money. When a solution is selected and paid for, the purchase price will come with add-on fees, taxes, and licensing charges, depending on contract terms; any ongoing support you may require. The costs associated with labor and wages are massive considerations to be taken into account, such as the research, planning, training, and implementation costs.
So, what do IT system failures cost?
It depends on who you ask. A failed project is not only incurring financial costs and burdens, but further cost blowouts and delayed rollouts can also create even more issues. Cutting your losses and ending a project sometimes needs consideration, but this is often easier said than done.The financial burden worsens when your implementation fails or is incomplete. You may need to invest more money and time into finding something else or fixing the existing system. Either way, the cost of a failed implementation will continue to resonate for a while. It can impact other projects as budgets for those might be transferred to try and fix the system issues. This may lead to other projects getting delayed or abandoned as resources go into fixing the system. Your business could find itself in a worse position than it started, with incomplete projects, time and money wasted, and little to nothing to show for it. A failure might also materialize after implementation and go-live.
In the case of milk supply chains, if the solution isn’t fully integrated and you’re not achieving a single source of truth, costly mistakes and errors can eventuate that can be very expensive. For example, when you’re dealing with a perishable commodity such as milk, inventory mistakes, and errors can be extremely costly not to mention wasteful when they go wrong.Failure tends to trickle down into other parts of the business, with long-term effects and indirect costs. The disruption to the company, clients, and customers from a failure like this can’t be underestimated. It's not just the company's reputation at risk but also the staff involved. Staff comes under pressure with tight deadlines, and stress from the extra project workload which can begin to compound. This can be very damaging to the organizational culture and environment. Across other parts of the business, unsuccessful software implementations may impact staff productivity and pose a risk to operations, the quality of work produced, and efficiency, with failure and delays, only making things worse. Over time if the issues remain unresolved, your bottom line will be impacted, leading to the most significant loss of faith from your stakeholders.
How to succeed in an IT implementation project
A successful milk supply chain software implementation has the power to boost efficacy and set a strong foundation for a company's future growth.
Follow these 7 steps to help set your project up for success:
- Ensure all departments understand how the solution will impact them and their processes. Build a shared vision and excitement around the project to help get continual backing from the team across your organization.
- Effective communication is crucial before and after implementation; the project manager should create a high-level plan or implementation roadmap to support project teams throughout the duration of the project. It outlines the activities involved in implementing, upgrading, or enhancing the solutions with deliverables, role descriptions, and additional guides. This brings accountability and ensures managers feed information to staff and the wider team.
- Transparency in your implementation will improve expectations and keep everyone on the same page.
- Getting your due diligence right is crucial. Research all possible vendors and weigh up the pros and cons of each. Remember to check references from other users that have already embarked on a digitization project with the vendor and solution.
- Ensure the vendor and software solution meets your specifications and requirements. Having a comprehensive, fully integrated, and single source of information is a must. Select a milk supply chain solution that’s highly flexible to accommodate your country-specific regulatory needs and the payment calculations unique to your dairy operations.
- Use the best practices from the prototyping stage as the basis of your solution configuration. Incorporating various business scenarios and processes (implementation content) into your planning simplifies solution design and configuration, helping contribute to a successful implementation.
- Remember that a milk supply chain solution isn’t static and will continue to evolve after it has gone live; constant upgrades are expected to be carried out. Ensure the vendor chosen has 24/7 support for this, and then create an agreed-upon support plan post-go-live.
Dairy companies should always strive to reduce the likelihood of a failed software implementation. It starts with weighing all possible outcomes, pros and cons, and costs to make an informed decision.
Do your due diligence when making a software purchase to help reduce any uncertainties and put your IT project into the best possible position to succeed in digitalizing your milk supply chain.