Scott Franchini is a partner at Phoenix-based RedHammer, an outsourced accounting and consulting firm specializing in the construction industry, who has held leadership roles at Deloitte & Touche, Deloitte Consulting and Microsoft. Opinions are the author’s own.
I’ve been implementing accounting software since the late ‘90s, and despite all the technological advances, the fundamentals of a successful implementation haven’t changed.
Through the years, I’ve seen countless projects in various industries, including construction, go off track — not because the software was flawed, but because companies made avoidable mistakes during the process.
Implementing new software is a major challenge for any organization, especially in the construction industry, where job costing, subcontractor management and compliance tracking add layers of complexity. Below are 10 of the biggest mistakes I’ve seen companies make over the years when implementing new software systems and ways to avoid them:
1. Underestimating complexity
One of the most significant pitfalls in any software implementation is underestimating the complexity involved. The system you're implementing may be more intricate than anticipated, or you may oversimplify the process, overlooking critical details. Misjudging complexity often leads to rushed implementations, putting the entire project at risk.
To avoid this pitfall: Thoroughly evaluate the software's capabilities and your business processes before starting the implementation. Break down the project into manageable phases, allowing for detailed planning and adjustments as needed and engage subject matter experts to assess and understand the full scope of the project.
2. Insufficient planning
Inadequate project planning is another common pitfall that can severely impact the success of a software implementation. Without a well-defined plan that outlines project goals, timelines and resource allocation, the implementation process can quickly become chaotic.
To avoid this pitfall: Develop a comprehensive project plan that addresses all aspects of the implementation, including initial setup, testing and post-go-live support. Assign clear roles and responsibilities to ensure accountability and communication throughout the project. Regularly review and adjust the plan to stay aligned with project goals and timelines.
3. Failing to reset
Overlooking the chance to reset key elements, such as your chart of accounts and cost codes, is a missed opportunity to enhance your financial and operational reporting. Implementing new software is the perfect time to clean up and reorganize these components to better reflect your current business needs.
To avoid this pitfall: Take the time to evaluate your existing financial structures and identify areas for improvement before migrating to the new system. Consult with financial experts to design a chart of accounts and cost codes that align with your current and future business goals.
4. Not identifying reporting requirements early
Failing to identify reporting requirements at the beginning of the project is a major pitfall. Without a clear understanding of the necessary reports, the system configuration may not support your business’s needs, leading to costly adjustments later.
To avoid this pitfall: Conduct a thorough needs assessment to identify all reporting requirements before configuring the system. Collaborate with end users to ensure the system will deliver the insights they need. In addition, incorporate flexibility in the reporting structure to accommodate future business changes.
5. Relying on vendors
Relying solely on the software vendor to set up and test the system can be risky. While vendors know their products, they may not fully understand your business processes or unique operational requirements.
Vendors often focus on delivering a generalized solution that works for a broad range of clients but may not align with your specific needs. This misalignment can result in a system that doesn’t fully support your processes, leading to the need for costly post-implementation customizations.
To avoid this pitfall: Take an active role in the setup and testing phases to ensure the system is tailored to your specific needs. Establish a cross-functional team within your organization to oversee the implementation and testing.
6. Not understanding your contracts
Not thoroughly reading and understanding your contract with your vendor is a common pitfall. Software vendors and service integrators typically include baseline services in their contracts, with any additional work often handled through change orders, which can increase costs.
To avoid this pitfall: Carefully review the contract, paying close attention to the scope of work and any additional fees. Consult with legal and professional experts who not only understand the legality but also have experience with software implementations to ensure that the contract terms align with the complexities of the project.
7. Insufficient training
Insufficient training can result in underutilization of the software’s capabilities and may lead users to revert to old processes, which can limit the effectiveness of the new system.
To avoid this pitfall: Develop a detailed training plan that covers all user roles and system functionalities. Provide continuous training opportunities, including refresher courses and advanced training sessions and encourage a culture of learning, where users feel supported in mastering the new system.
8. Not prioritizing data migration
Data migration is a critical step that, if not done properly, can cripple a new system. Poorly managed data migration can result in inaccurate or incomplete data, leading to significant problems in daily operations and decision-making.
To avoid this pitfall: Prioritize data migration early in the project, allocating sufficient time and resources for this task. Use data validation tools to ensure accuracy and completeness before going live. In addition, you should convert master data early and do a test run of critical transactions to ensure the system behaves as expected.
9. Overlooking post go-live support
Failing to plan or budget for post-go-live support can significantly undermine your software’s long-term success. Even the most robust systems require regular maintenance, updates and troubleshooting.
To avoid this pitfall: Include post-go-live support in your initial project plan and budget. Establish a support team or contract with external providers to handle ongoing maintenance and updates. Plan for regular system audits to identify and address any issues early on.
10. Poor change management
Poor change management can derail a software implementation. People often resist change, especially when it disrupts established workflows. Without a structured approach to managing change, adoption of the new system may suffer, resulting in underutilization or reversion to old processes.
To avoid this pitfall: Communicate the reasons for the change clearly and consistently to all stakeholders. Involve key stakeholders in the decision-making process to build buy-in and reduce resistance and provide ongoing support and resources to help users adjust to the new system.
The journey of software implementation is rarely smooth, but with the right planning and foresight, it doesn’t have to be a source of frustration or financial strain.
Whether you’re a small construction company or an industry giant, the key takeaway is this: software itself is rarely the problem — how you implement it is what makes all the difference.
