ERP implementations usually consume more time and money than expected. The average total implementation time is 18.4 months. During the ERP software selection, it can be difficult to know the timeline of implementation. While sales reps usually tell business owners all optimistic scenarios, they forget to take into consideration some key factors that determine implementation duration. In fact, according to Panorama Consulting’s 2008 ERP Report, 93% of ERP projects take longer than planned. With that in mind, it is important to go into the software selection and implementation planning process with eyes wide open. Indian SMEs usually don’t have the bandwidth to spend so much time on ERP implementation.
Key Factors Why ERP Implementation Takes Time
There are many “critical success factors” which dictate how long a particular implementation will take. We have broken down some of the more important ones into three areas: the business, the software, and the people. As you read through them, you’ll be able to evaluate them in relation to your business. The estimation of each will move the implementation timeframe to one side of the implementation range or the other.
1. THE BUSINESS
Is the company a manufacturer or a wholesale distributor?
Manufacturing businesses are usually more time-consuming to implement. Implementations for “process manufacturing” companies like food and pharmaceutical manufacturers are typically more time-consuming than “discrete manufacturing”. Implementations for wholesale distributors are generally quicker, although they too have much to work through.
Cloud ERPs ie Software as a service (SaaS) is usually hyped by sales rep as something that’ll be easily implemented. But ERPs are complicated especially for SMEs who have just started to think about digitizing their business processes. So the implementation will most likely go over the budget and take longer than expected.
SME teams are usually lean with not more than 30-40 people. ERPs came at a time when only big companies digitized their business processes. They usually have about 13 modules. Some modules aren’t even relevant for SMEs. For Example, SMEs don’t have a Human Resource Department or Marketing department. Thus for SMEs ERP implementation takes a lot of time.
2. THE SOFTWARE
The complexity of the software
ERPs are notoriously complex. There are many examples of manufacturers who abandoned the implementation before it was completed just because it was too complicated. The number of modules required can also increase implementation time. Most of the modules are too new for SMEs. Thus their implementation takes time.
Software-as-a-Service (SaaS) versus on-premises ERP implementation
ERP implementation on-premise was common at the time when the internet was not easily accessible. Cloud software takes less time in implementation than On-Premise services but still, that doesn’t make it any less complicated.
How much customization is needed
Users are usually resistant to changes. So they demand customizations that make the new system somewhat like the old one. Upper management often thinks this is easy to contain, but great care must be exercised to resist all but the most necessary changes. This should be encompassed within the change management planning, which is necessary for successful implementations.
System selection process
How did you select the particlular ERP? What was your selection criteria like? Here are some factors SMEs should definitely consider
- Make a List Of Requirements- Make a list of requirements that your business has, the number of departments and their necessities.
- Look at all the options- There are numerous digital solutions in the market, therefore do not limit yourself with just the ones everyone else is using. Read their reviews find out what kind of companies should use which software.
- Professionalism– The digital solution you will be opting for will act as a partner in your business as it will be taking part in the entire business. The right platform for your business should have solid customer support that will help you in on-boarding and will be available when you or your team faces any trouble.
- User Friendly- Read and scrutinize deeply about its flexibility. When you purchase a product you would want to use it as fast as possible and hence make sure that it is user-friendly and your employees can adapt to it quickly.
- Budget- . Budget is a factor you should consider while shortlisting software for selection as you cannot just go ahead with software that claims to be on the top of the market and have a shortage in the budget for your business. Calculate all the expenditure that will go it purchasing and everything that comes with it like customization, monthly revenues etc.
- Free Trials/Demo- The most important factor is taking a trial of the software. This makes everything easier for you. You can easily learn about the functions of a software when you actually use it and check on your own whether or not is it useful for your business.
3. THE USERS
Number Of Users
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.
How Tech Savvy Is The Team
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. You should be sure if your business can afford that.
Can You Afford ERP Consultant
ERP implementation is complicated and usually requires businesses to hire an ERP consultant till the time of successful implementation. ERP consultants are expensive, usually costing about 60% of the total ERP budget. SMEs already having spent so much money on implementation usually don’t hire a consultant and thus the implementation time increases. Looking for a solution that can be implemented easily ERP or not, should be a priority.
SMEs when implementing ERPs should definitely consider the above factors before going with an ERP. 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.