Enterprise resource planning solutions have been around for quite some time. But whether or not a business can survive with or without one is debatable. As your business grows, there’s a need for automation in business processes, even more so as a lean team. In your position, many companies think of implementing ERP solutions to their businesses. The objective of implementing an ERP system is smoothly integrating data and processes across an organization. Still, many companies end up running into failure during the implementation. In fact, it is believed that as many as 29% of all ERP implementations end up failing.
So here are the top 3 challenges that SMEs face in ERP implementation. By the end of this article, you should be able to decide for yourself if ERP is something your business needs or not.
1. Managing Complexity
As a new ERP system is no small investment getting it right should be the number one priority. Most SMEs don’t have the human resource to handle an ERP implementation. In fact, it is not uncommon for small companies not to have an internal IT department. This means a lack of valuable IT knowledge. This can all lead to stress and confusion.
How can you get it right? Probably the best solution would be to hire external ERP consultants who will not only implement the solution but will also be part of the planning (pre-implementation) and training of users (post-implementation). But EP consultants are expensive, almost 60% of the implementation cost. Implementation cost is anyway way more than most SMEs can afford. Still, there’s no guarantee that the implementation will be successful. Also, there have been instances where after the upfront payment the vendors aren’t as supportive at the time of implementing ERP solutions, leaving business owners helpless and nowhere to go.
So maybe what SMEs need is not an ERP. Just an easy to use and affordable integrated solution for your business that provides amazing customer support. Which is exactly what TranZact brings to you and your business. The basic version of the product is free and you and your team’s onboarding will be done with the guidance of their expert. You can check out our success stories here
2. Getting Your Team Onboarded
Here are the top reasons why your employees don’t want to use ERP. There’s also no doubt that most Indian SMEs are unstructured with employees who are uncomfortable with the idea of digitization. Making them comfortable with using complicated ERPs can take a lot of training time. Employees’ confidence with an ERP solution is quick to waver when training on the system is rushed. SMEs usually have a limited number of employees and they can’t afford to train their employees during work hours thus, no training really happens and employees end up having no confidence in the system.
Also, employee drive often relies heavily on the example set by company management. If the management is also not sure about the implementation and how to use the system the staff also will have an aversion to change. Usually, big organizations get ERP because they want an integrated system for their big team. But SMEs have lean teams. Their purpose for getting ERP or any other solution is to streamline their business procedures. But ERPs usually end up making these procedures even more complicated by involving several modules. Therefore it takes a long time for implementation. And users are intimidated by so many modules.
3. Maintenance Cost
Implementing ERP solutions also has maintenance costs attached to it. If managed casually, it leads to the failure of the organization. It requires time to time maintenance which adds up to the recurring cost. Working on a slow system can be very unproductive and frustrating.
ERP applications also require sufficient storage and high work performance. Low investment in internal hardware may result in various software issues. And all of this is outside the implementation cost which is a lot. SMEs can’t and should not afford ERPs when it is costing them a big chunk of their revenue. Thus we say it again, investing in an easy to use integrated cloud solution is the best decision for SMEs
SMEs when implementing ERPs should definitely consider the above factors before going with an ERP. Your staff should definitely be comfortable with whichever platform you decide to implement. If you end up deciding that ERPs are not right for your business, it doesn’t mean you can’t digitize your business. You can move to a solution that is affordable and easy to use. TranZact gives you exactly that. It is a web-based solution that is meant for SMEs to digitize their business processes from customer inquiry to dispatch. What is best about it is that the basic version of the product is free so that SMEs can relax and not worry about silly amounts of money.
Digitization is a must for the Indian manufacturing sector, specifically for SMEs. It will help enhance the effectiveness, profitability, and overall growth of the businesses. This, in turn, will benefit the economy and allows for maximum consumer benefits and satisfaction.