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7 Common Mistakes of Companies While Choosing ERP Solution!

08 Apr

7 Common Mistakes of Companies While Choosing ERP Solution!

Basically, ERP that stands for Enterprise Resource Planning involves the management of business processes by using technology for generating real-time reports efficiently. You as a business owner will not deny from ERP Software solutions being the necessity of the existing businesses around the globe despite their industries. There are various reasons that have made it compulsory for the companies, from which some of the top reasons are illustrated in the below picture.

Enterprise Resource Planning Software implementation in one of the most thoughtful decisions not only because it requires high investment but it involves a lengthy procedure, therefore, a company cannot invest the same amount of time and effort again and again. In a majority of the cases, it has been evident that due to different reasons, the inability of the ERP in managing complete business operations is analyzed in the middle of its implementation. This has caused a huge loss of investment, time and efforts to the businesses. What these issues are? How can a business avoid them? This blog has addressed the six common mistakes that businesses have done in the past. If a manager acknowledges and avoids making these mistakes, they can ensure the effective implementation of ERP solutions.

  1. Do Not Research On The Database Of The System

What defines the strength of ERP Software? The database of a system defines its capabilities and limits. Therefore, it is important for the companies to research on the database of the ERP software they are considering whether it has the flexibility of adjusting according to the fluctuations and advancements of the work operations. If an ERP system does not provide a solution to the existing or anticipated issues, then it is a waste of money.

  1. Do not Give Complete Information of their Work Operations

Why do companies implement ERP systems? What is their main purpose and expectations? It is to streamline the operations effectively and to generate maximum profits. How can operations be automated or streamlined through software without incorporating details of all the operations? If the requirements from the system are not provided accurately, then the system will not be returning the expected experience. More importantly, the purpose of ERP software implementation is not just to automate but also to improve the business processes. This makes it compulsory for the companies to identify and indicate the areas in their business that require improvement in order to get it implemented.

  1. Does Not Include The Entire Workforce In The Decision-Making

Who are the actual users of ERP? The people work on the ground are aware of the actual and unstated complexities of your business. Their comments and suggestions during the customization of the system are highly important. The software vendors can effectively understand the workflows and the expected improvements from the participation of the workforce. The other issue caused by not involving the workforce in the customization phase of ERP makes it difficult for the employees to understand as well as accept the changes in their work structure. Above all, if your users are not involved in the ERP implementation process, they can never become super users.

  1. Unrealistic Planning

Planning of ERP is one of the most crucial parts of its successful implementation. Firstly, the cost of the ERP is affected it’s planning. The resources of a company involved or engaged with the implementation process usually become an expense because their responsibilities and performance get affected. Secondly, unrealistic planning leads to the frustration of the management while the software vendor also losses interest. Other than this, the most common mistake of the vendors is that they do not have any up-front planning of getting the company’s information. Due to this inefficiency, it usually becomes highly challenging for the vendors to understand the business flow. And if this part is not clear, how can they evolve those practices and maximize the company’s benefits and efficiencies? It is the result of unrealistic planning. You can have an understanding of this issue from the below picture.

  1. Company’s Non-Serious Attitude And Lack Of Attention During The Implementation Phase

One of the most important investments in the process of ERP deployment that companies usually compromise is the availability of “Project Manager”. It is extremely important to appoint a project manager that has prior experience in the software and also the understanding of the company’s workflow. Do you know why project managers have such a significant role in the ERP implementation process? It is because they streamline all the business operations and ensure that the project is on schedule. Moreover, a project manager acts as an intermediary between the company and the software vendor for resolving the issues caused due to lack of communication, misunderstanding and etc. The documentation also requires an individual resource for recording all the workflows and the other related information graphically as well as in words.

  1. Avoiding Change Management

Organizational change is one of the most complex topics and has affected businesses in the past.  Due to the industry pressure and increased complexities of the business operations, the businesses have forcefully implemented the ERP software but remain resistant towards the organizational change. The change in the business operations and their work-flow has not been happily or willingly accepted by the companies in most of the cases. This trend and attitude of the companies in the past have not only negatively affected the implementation of ERP but restrict it from generating required outcomes.

  1. Inadequate Training

The after sales services of software vendors should be investigated before appointing them. This is because if the understanding of ERP system would have been this easy to understand then why would they be costly? And most importantly, why the consultancy and training cost would have been a prominent portion of the overall ERP cost? And this is one of the reasons that companies usually go with experienced software vendors that have dealt with the other operators. This is because they have the experience of helping employees getting along with the operational changes without getting frustrated. In the past, it has also been observed that the majority of the companies do not consider training as important to invest money as well as effort in it. This makes the whole ERP implementation failure.

Conclusion

ERP implementation will keep increasing in the coming years as it has been anticipated that it will react to $41.84 billion by 2020. Therefore, the above-discussed mistakes should be avoided by the companies to experience high profits with improved business efficiency. Avoiding these issues will also help them in reducing the extra costs, time, efforts and resources.

(Source: https://www.dartconsulting.co.in/market-news/crm-and-erp-global-market-and-latest-trend-how-will-the-collaboration-of-these-two-technologies-impact-the-market/)

Although, avoiding these mistakes does not mean that the implementation will have no issue but at least companies will not experience the same frustrations. In fact, they should be reviewing the cases of their competitors and other companies to learn from their ERP implementation journey. This is because there are no options for them to avoid ERP software implementation because this might cost them their survival in the industry. ERP software solutions have become the source of efficiency, competitiveness and generating profits for the businesses.


 

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