The benefits of ERP systems are numerous. Whether it’s obvious improvements to organization, or slightly more “hidden” advantages like reducing overhead or inspiring more collaboration – if you look for the good stuff, you’ll find it! Every ERP provider is more than ready to give you a list of benefits… But what about the Challenges of Implementing an ERP? Implementing an ERP system is no small undertaking, and some of the setup pitfalls might go overlooked.
To help you understand what your company is getting into, here are some of the most common challenges of ERP implementation:
1. Anticipating Costs
One of the first major hangups that can stall implementation is – of course – money. As we discussed in a previous post, costs will vary depending on the type of system you choose. With on-site systems, there will be equipment costs. With online/cloud-based options, there will be ongoing service fees. These are the unavoidable costs of having ERP… But problems arise when the expenses aren’t calculated and anticipated in the planning stages.
Make sure you thoroughly calculate all of the costs that will come along with your ERP system of choice, including equipment, subscription costs, training, maintenance, customization, and so on. The more you know going in, the fewer financial surprises will throw a wrench in your ERP efforts.
2. Effective Training
One of the worst mistakes you can make is implementing and ERP system, but skimping on training. If your staff doesn’t know how to use the system, the system won’t be used. Even if many key employees receive training, gaps in these efforts can have serious consequences. During and after the implementation, making sure ALL employees know how to use applications will ensure you get the most out of your investment. If some people aren’t comfortable with software, or don’t know why the information tracked in the ERP system is important, you may be doomed to redundant instruction, inefficient processes, and missed opportunities for functional improvement.
3. Compatibility
Like costs, compatibility issues are often thought of peripherally, but sometimes not reviewed with the necessary level of detail. If you are upgrading or changing ERP systems, or just installing new modules or customization, you have to make sure they will work! Enlist the services of your vendors and software experts to test upgrades and additions thoroughly. If you encounter compatibility issues, you risk disrupting business operations. Staff may not be able to access the information they need, or worse, entire systems or tracking processes could be broken.
4. Setting Goals
ERP systems can accomplish so, so much… But the countless options can also be a burden if you aren’t planning ahead. Use your planning and strategy sessions to determine what you want to accomplish with ERP. From there, you can build out systems and specific uses to achieve those goals. Without a strategy in mind, you’ll have all kinds of data… And nothing to do with it. Or you may have highly sophisticated systems, but no strategy for how they all work together to make your business run more efficiently.
ERP is an excellent addition to many, many types of companies – but make sure you know what you want to accomplish before you start implementing. Otherwise, you risk taking on costs and training, investing both time and money into an ERP system without reaping the real benefits.
While we certainly recommend employing ERP because of the massive improvements it can bring to your company, you have to play it safe! Keep these things in mind as you explore your options… And as always, you can contact us, and we’ll help you get started!
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