Enterprise resource planning (ERP) systems are designed to help companies run the back-end processes of their businesses in a more efficient and centralized way. They track, manage, and control finances and inventory, create sales and forecast reports, manage customer relationships, and more. Deciding which ERP system is best for your company can be a difficult process. Because the best ERP system for one business might not be the best for all businesses. But despite the difficulty and confusion of choosing from so many options, one thing remains clear: An ERP system is a critical factor in a company’s success.
However, implementing an ERP system incorrectly or not effectively enough could have a negative impact on your business. Below we look at some of the most common ERP mistakes made by companies:
One of the most important steps in implementing any ERP software is careful requirements gathering: you have to make sure you know exactly the requirements the business will have from the software before you put any effort or resources into implementation and maintenance. Business owners understand their businesses inside and out, they know how specific operations within their business work, and they should be able to explain this through documentation and/or diagrams. Providing documentation is essential because as much as the business owners may know about their business when they try to communicate their ideas to their IT department or ERP consulting, they can get too detailed and confusing, or they may have an idea of specific functionality that they assume their ERP provider will be aware of. For example, they might have an idea to integrate a piece of software like SugarCRM with their ERP provider; but if they aren’t specific about this in their documentation, there is a good chance it may not make it into the initial implementation, which can cause almost as many issues as not having that functionality at all.
Once the requirements for the ERP software are gathered, it is important to include the users of the ERP system in the decision-making process. This means that every department head or every member of the IT department should be consulted about how the ERP system will affect his or her department: what data they need, how they need to access it, how they use it, and how do they currently use it today? Are they satisfied? If they aren’t, why not? Having an open discussion about the current processes will help to ensure that the future needs of all departments will be met, as well as giving equal input into the functionality of the ERP system.
Features, while they could be important, are not always the most important part of an ERP system. While the sales representatives for the software that you are considering will probably boast about all the features it has and how it’s the best system out there, they shouldn’t be the ones determining which features you actually need and want to pay for. Your IT department should be aware of which software features are essential for the software to successfully run your business, and they need to be specific about these features instead of just stating blanket statements like “we want a database feature.” The more specific they are about these features, the better.
ERP systems are very complex and it will take time for end-users to become familiar using it. It is essential that from the start end-users are trained on the software. This training is important for ensuring that the software is effectively and efficiently implemented, and over time it can help save time and money: if end-users could reduce the time it takes for them to perform a particular task, they will also reduce the resource consumption as well as the potential for any mistakes.
Most ERP software is used for the core and mission-critical functions within a company, and therefore upgrades are necessary to fix any security issues and maintain functionality as technology advances. If end-users are not prepared for any necessary updates or changes to the software, it can cause a lot of difficulties. While many companies don’t think about the end user’s reactions when they implement a new ERP system, they should make sure end-users are aware of any upgrades needed for both the software and hardware.
Although introducing an ERP system to your company can appear to be a challenging and confusing task, at least a basic knowledge and an understanding of the type and number of features available becomes helpful at some point. As you continue to gain experience with the software, focusing on the business benefits provided by these systems will help you to evaluate your business more effectively.