Are you thinking about implementing enterprise resource planning (ERP) software? This software can help streamline and automate your back-office functions, freeing up your employees to work on more mission-critical, value-adding initiatives.
However, before you begin thinking about an ERP selection, it’s important to understand exactly what ERP software does. While we’ve covered that topic in blogs like this one, you may still have some misconceptions about how the technology works and what you can use it to achieve.
Today, we’re busting some of the most common myths and misconceptions in ERP software. If you approach software selection while believing these myths, you may be setting your organization up for ERP failure.
8 Common ERP Software Myths and Misconceptions
1. It Can Only Benefit Large Companies
One of the biggest ERP software misconceptions is that only large companies can benefit from its features. There are many types of ERP systems designed for organizations of all sizes. Most ERP solutions are also fully scalable and flexible, allowing business owners to customize the system to their needs.
As your business grows, your ERP system can grow along with it. You can implement only the functionality that your business model requires, adding more features as necessary.
A Failed Payroll System Implementation
Panorama’s Expert Witness team was retained to provide a forensic analysis and written report to the court regarding the failed implementation of a major software developer’s ERP/payroll system.
2. It’s Too Expensive
ERP systems can get costly, especially if you add customizations. However, this isn’t always the case. The exact price you’ll pay depends on several factors, including:
• The size of your business
• The number of employees using the system
• The number of modules, features, and extensions you need
• The amount of organizational restructuring the implementation will require
In addition, most companies will find that the ROI on this investment is significant. With an ERP system in place, your employees don’t have to spend hours of valuable time on manual, repetitive, time-consuming tasks. Instead, they can work on value-adding projects that help build revenue, improve customer satisfaction, and attract clients.
3. The Implementation Takes Too Long
Are you interested in reaping the benefits of ERP software but worried that the project will take too long to roll out? While early ERP systems were complex to install, modern solutions are designed with preconfigured best practices to accommodate a wider range of business models, which makes them easier to implement.
Still, you should take your time at every stage and prioritize key areas such as project planning, organizational change management, and project management. This can help you avoid common roadblocks that lead to ERP failure.
4. Out-of-the-Box Systems Aren’t as Functional
Many companies think that to get the best ERP software, they must invest in a pricey custom ERP system. However, there are many benefits to buying a pre-made, out-of-the-box system instead.
Implementation costs are normally less expensive with a pre-made ERP system than a custom system. With a custom ERP system, you may need to hire experienced developers to help you manage critical stages of the project, and if a core member of that team leaves, they’ll take their knowledge with them.
In contrast, if you purchase a ready-made system directly from an ERP vendor, you can rest assured that you’ll have their support for the duration of the project.
If you’re looking to make your effort as affordable and straightforward as possible, this can be an ideal way to go. However, overall functionality may be limited without any custom features.
5. It’s Only for Your Customers
At its core, an ERP system is designed for your internal employees. It delivers a host of operational advantages, from reducing repetitive tasks to improving teamwork and minimizing the need to print documentation.
6. It Only Benefits Certain Teams
Another misconception is that ERP software is only reserved for certain teams, such as the HR and accounting departments. Truthfully, it can benefit every group. Even if an employee doesn’t interact with the software directly, they’ll still reap the benefits of easier collaboration and improved communication.
When implemented correctly, ERP software can act as the internal management hub for your entire company. This includes all your teams, across all locations and divisions.
7. It Doesn’t Require Human Input
As smart as they are, ERP systems aren’t robots. They can’t perform every function for you. At least for the foreseeable future, you’ll still need to add inputs, share data, and manage permissions.
This is why it’s important to invest in an end-user training program before going live with your new software. Not only will this expand their skillsets, but it can also reduce change resistance.
8. It’s the Same as CRM, SCM, or MRP
We get it. Business acronyms can all start to look the same at some point! However, an ERP system is not to be confused with customer relationship management (CRM) software. It’s also not the same as supply chain management (SCM) software or manufacturing resource planning (MRP) software.
While ERP can benefit your entire organization, a tool like CRM is more customer-focused in nature. Similarly, a supply chain system is more focused on supplier relations and inventory management.
Clearing the Cloud: Demystifying Misconceptions About ERP Software
There are quite a few misconceptions surrounding ERP business software. This is just the tip of the iceberg. Instead of listening to hearsay, why not head straight to the source?
At Panorama Consulting, we’re well-versed in every aspect of ERP implementations, from initial vendor selection to post-go-live support. We’ll help you separate fact from fiction, so you can be confident as you move forward in your project.
Contact our ERP implementation consultants below to learn more and schedule a consultation!