Enterprise resource planning (ERP) systems have become widely used in businesses of all sizes and types for a number of years now. Even small businesses and family-owned companies have joined the mainstream trend of implementing ERP software.
The ERP trend has become so strong that the vast majority of small- to medium-sized businesses (SMBs) have performed an ERP implementation at least once (some of them twice or even more often). But even though ERP usage is widespread and the norm for most companies of any size these days, there are still challenges for each new implementation, as each organization is different and comes with its own needs, expectations, and processes
1. Finding the perfect ERP
If a company has decided to implement ERP (Enterprise Resources Planning). The very first question that top management will face is how to choose the perfect ERP that meet their requirement and achieve productivity gains among the 500++ ERP in the world.
There doesn’t have the right answer to find what company need, but there are multiple factors that they should consider on before select the ERP. First, ERP team chosen should have experience within the industry which able to help you meet your business goals. Otherwise, you could end up making a very costly implementation of ERP. During ERP selection should be considered as seriously as possible for the reason that ERP system choice predefines a company’s strategy for at least the following 6 to 10 years and, no doubt has a huge impact on the future success of the entire business. It is important to ensure you gather enough information about your overall requirements and have open conversations with the ERP team. so you can find the right software to meet your business needs and the right partner to support you in your ERP journey
2. Commitment from top management
ERP is a complex undertaking in any company which requires a good team with decision-making capabilities and it brings significant changes to the company’s current business model and standard operation procedure (SOP) that has been using for years or even decades. Therefore, top management play a crucial role in ERP implementation. Their involvement is extremely necessary for the success of a project. Any form of ignorance will lead to unnecessary frustrations in work place. Also, it will cause delay in operations and ineffective decisions.
It is imperative that those who lead from the top are fully committed to the ERP implementation. Actively communicate with key personnel and ensure they understand the need for them to be fully involved. Also involving them in the decision-making process will increase the likelihood of commitment. The better the communication, the more likely you will have complete buy-in from not only your managers but also the rest of the team.
3. Ensure Adequate Time for System training
The failure of most ERP implementation projects can be attributed to poor management. The truth us, ERP technology will only be as good as the people using it. Many companies don’t realize the time consumption of an ERP implementation process. An ERP system is implemented step by step and because it is very standard, it needs to be designed to a particular business, to handle the processes just the way the company needs them.
So, it is very important, that implementation is done by stages. Trying to implement everything at once will lead to a lot of confusion and chaos. Appropriate training is very essential during and after the implementation. the company is responsible for ensuring that the employees receive sufficient training. The chances of successful implementation of the ERP system increase significantly if the staff is provided comprehensive training and receive proper motivation to use the technology.
What’s more, they should have enough know-how and expertise to carry out proper testing for determining whether the ERP system meets all the business expectations and requirements. Otherwise, the system will not perform correctly when deployed. Testing is also a great way to recognize what your employees have learned so far and highlight queries, so they can be resolved before the ERP goes live.
4. Resistance to change
It’s been observed that despite of training, many employees leave the organization after the implementation of ERP system. This is the most difficult type of issue to resolve. The system itself is a non-living and logical entity that follows logical steps and processes as it has been programmed to, but the users of the system are humans who were used to processes with software being one way and will more than likely find it hard to switch to a new way of doing things, especially if the benefit of the new methods is not immediately obvious or forthcoming.
“It’s always been like this, long before you came in,” “I don’t think it will ever work,” “It’s not working on my PC,” “I will be talking with the CEO about this system,” or “You don’t understand how it should work”—these comments should sound familiar to anyone who’s ever tried to implement a new system or change users’ requirements. Despite the clear benefits of ERP solutions, people just really don’t like change, and replacing such an integral system will inevitably lead to resistance and delays from your team. This is worse if your team don’t fully understand the importance of implementing your ERP.
If an ERP system isn’t adequately flexible, your company may have to adapt its processes to suit the ERP for it to work. This may seem a little backwards, and the time and resources it would take to reorganise your business and retrain your understandably reluctant team would not seem worth it.
Always take your time to properly train your staff before implementing your new software. Focus on why the new ERP will make their daily tasks easier, rather than more complicated.
5. Lack of budgeting
ERP applications modules will require good processing speed and adequate storage. Low investment in internal hardware may result in various software issues and Working on a slow system can be very unproductive and frustrating.
Besides, total cost of implementation also depends on the customization cost. Greater the customization, higher will be the final implementation cost. All ERP systems need regular maintenance, which comes with associated maintenance costs. An ERP system might seem cheap to start with, but if you don’t factor in the maintenance costs attached to it before implementation, you can end up with overwhelmingly large sums to pay.
In the long run, ERP systems can help businesses increase efficiency and productivity, but implemented badly could have the opposite effect, which is something that is not always taken into account. When budgeting you must take into account the financial costs and ERP project team members time. It is essential for someone within the company to take charge of the project, communicate and work closely with the ERP provider in order to achieve the best results.
