If you are considering implementing ERP solutions for your company, chances are you are being bombarded with advice and information. As you weigh your options regarding one of the biggest decisions concerning your organization, you need to be really sure of the decision you are going to make. The purpose of this blog is to debunk some of the most common ERP implementation myths associated with ERP solutions. You can consider the following facts before making an investment in any ERP solution.
Myth 1- Streamline Workflows
Well this fact isn’t completely untrue. ERP systems are designed to offer multiple modules to handle many of your business processes in one centralized location. But are they meant for an SME which has a limited less tech-savvy workforce?
Adding a brand new ERP system to your company can take time, especially if you’re operating with outdated hardware. It’s not uncommon for some ERP implementations to take 2-3 years, depending on the scope of the software. This means if you want an ERP system you have to start planning years in advance to avoid disruptions to your work. Cloud-based ERP solutions may be faster to install, though they can still take time.
After installation, it’s time for training to start. Every user will need some degree of teaching before they can comfortably utilize the new software package. Some may learn faster than others, but a steep learning curve can slow down your company’s transition. Even experienced tech experts will need to start from scratch with a new ERP system, so make sure your workers are ready for the challenge before implementation. So do consider these facts before implementing ERP solution to your business.
Myth 2: Better Financial Planning
One of the most common ERP implementation myths is that it helps your business in better financial planning. As mentioned before, ERP solutions have modules for forecasting and reporting a wide variety of data. Analytical tools go through historical and real-time data to provide the best possible information for informed decision-making. ERP vendors usually sell this misinformation to SME owners. What they are never told is that implementing ERPs is way costlier than the upfront payment.
Any new software will cost money to implement, especially if you have to upgrade your hardware system as well. And ERP software usually requires some level of training from the vendor before you can get started. The training is generally included in installation costs. But it might be a separate fee if you need a lot of sessions. Any updates to the platform may require additional training as well.
Opting for an ERP software as a service (SaaS) can also increase the price. Plans are usually paid in monthly or annual installments, with the yearly plans offered at a slight discount compared to the monthly ones. And for better financial planning and accounting, you should rather spend money on a solution that is economical and risk free.
Myth 3: Easy Data Migration
Biggest ERP implementation myths of all time is that the data migration is easy and can be completed without any hiccups. The first time you use a new ERP system, you’ll have to input your existing data into the new format. Depending on your industry, this can take a lot of time to complete manually. The more data you have, the longer this process will take. Even digitized data will take time to fit into a new system. You’ll have to double-check no data is lost or duplicated during the migration process. This can cause exhaustion and can be discouraging for your team to move back to their traditional methods of business.
Myth 4: One Time Cost Then No Worries
Vendors usually convince business owners into buying ERP by telling them that the cost is one time for a benefit of lifetime, that business owners won’t regret this investment. When in reality the implementation of the software to the business is also not guaranteed.
Cost of the software can be exceedingly high and you could end up spending up to five figures for a single license. This definitely is one of the main disadvantages, especially to smaller manufacturers that are more on a fixed budget. The upfront cost of the software alone can be prohibitively high, especially for small-to-medium-sized businesses. SMBs can avoid the upfront costs with a cloud solution, which are typically paid on a month-to-month basis. Overall, the cost of the software is by far one of the most important factors to consider before purchasing the software.
The software alone is a substantial investment and the implementation process cost can cost a rather large amount as well. Businesses and manufacturers need to account for the cost of manpower and time necessary for successful deployment. This may call for additional IT staff, ERP consultants, and software training specialist. This component is extremely important to consider when implementing ERP software.
It is pretty clear from the above article that for SMEs the disadvantages of ERP outweigh the advantages. Although it’s worth checking over first as every business is different. Can you afford a complete software overhaul? Are your employees receptive to training? How long will it take before the long-term benefits outweigh the initial drawbacks? These are some of the questions you should know the answer to before ERP implementation. If you decide that you don’t want to spend money on ERP, it doesn’t mean you can digitize your business. You can take the first step to digital transformation with an easy to use inexpensive platform made for small businesses like TranZact.It’ll help you streamline your business processes from customer inquiry to dispatch.