Misconceptions About ERP Implementation
Enterprise Resource Planning (ERP) software implementation can often be perceived as a long, tedious and even risky project. However, for many, this is not the case. In this article, we explore some of the most common misconceptions about ERP implementation.
(ERP) solutions are widely used in organisations to help manage core business processes such as finance, manufacturing, supply chain and more. Research published in 2019 showed, the top three business goals cited for implementation are achieving better performance metrics (46%), cost savings (46%), and improved efficiencies in business transactions (40%). However, data collected by Technology Evaluation Centres around ERP challenges suggested that around 50% fail the first time – the most common reasons for this are inability to plan project implementation and costs, internal resistance and poor data quality.
An ERP system is often one of the most critical to a business making implementation or upgrade a key business project. To help you understand ERP implementation a bit more, we have noted below some common misconceptions or myths around ERP implementation.
Many businesses across many different industries require an ERP system, however, due to the perception that it is very costly, they often seek out a cheaper solution that underperforms or they tend to postpone choosing a solution.
Often, cost overruns are caused by inadequate business requirements for a system, which can include a very broad scope, unnecessary functionality or missing functionality that is critical to the business. This can not only drive-up cost but can hinder the success of a project. Proper planning ahead of implementation can help avoid cost overruns.
It's Only for Larger Companies
Historically, ERP systems were quite expensive to acquire and implement with new IT infrastructure required and staff needed to help maintain it. Only larger companies with substantial financial resources and a larger skilled IT Team could opt to implement an ERP system and expect a return on investment in a reasonable amount of time. However, this is no longer the case. Not only have many ERP systems been built for smaller companies, but many well-known ERP Solution brands have also moved towards cloud-based ERP which makes it easier for smaller and SMB enterprises to avail of a good quality ERP system. The advantages of these cloud ERP and SaaS (software as a service) solutions include a reduced upfront price, quicker roll out and more.
Implementation Can Be Handled Internally
An ERP implementation is generally not a small task, and it is often unlikely that your IT team would have the required expertise. Even if they did, focusing on implementation would take time away from their regular daily tasks which can interrupt the running of other critical systems. Working with a technology partner who is experienced in ERP implementation is often the best way to do an ERP implementation. Their experience will help your organisation from planning right through to support.
ERP Only Benefits Certain Teams
While IT professionals can play a big part in ERP implementation and maintenance, ERP should benefit key staff from all departments. This is something to be considered when planning too, if this system is to benefit all departments they should all be involved and considered throughout the project. ERP solutions have the potential to streamline business processes across many departments, so all departments should be able to reap the rewards of an ERP solution within their business.
Support is a Secondary Thought
For most companies, ERP is a critical system that many users depend on. Therefore, when choosing your partner for implementation, it is essential to consider support. Planning for the ERP system support and user training is something that is part of all successful ERP implementation projects. These costs should be taken into consideration when pricing your technology vendors.
A Long Roll-Out Period
A long implementation period was definitely expected with older ERP systems, however, more modern ERP systems often have an out of the box version that can be delivered in a much quicker time frame. Also, cloud ERP systems or SaaS ERP reduce the time needed for roll-out too. Although, it’s important to note that the roll-out time is dependent on what type of ERP your business needs and how we can tailor a solution to meet those needs.
Customisation is Required
In general, organisations often want the ERP solution to meet their needs exactly and since every organisation is different, customisation may be required. As mentioned above, out-of-the-box solutions are required but it is often the case that the company will make some changes to best suit them. It is important to discuss this with your technology partner to thoroughly understand what the new ERP solution can do. Integrations can often be why customisation is needed, however, some ERP solutions can provide seamless integration so it is dependent on the business model.
If you would like to learn more about ERP implementation, get in touch today to speak to one of our solution experts.