When we speak about any software for business, we normally mention benefits it’s able to yield, goals it will help to reach and use it will bring. And indeed, there are so many advantages you can get if you choose in favour of software implementation! It’s possible to give endless examples of how software can facilitate problems solutions and help your business prosper. But there are always two sides to the same coin, and everything has its shortages along with advantages. The same thing is with software solutions. In this article we speak about challenges and risks faced by business owners when implementing ERP solutions to their companies. Well, let’s start.
ERP Solution. What is It and Why to Implement
In general ERP (Enterprise Resource Planning) systems are designed for resource management and acceleration of processes within the company. With implementation of an ERP system it’s possible to decrease the negative impact of the human factor and optimize workflows that take place within the company, which has a lot of different departments, units and staff. ERP system covers a wide range of company’s functions, such as:
- Business processes integration into one system
- Planning quality increase
- Monitoring of all departments’ functionings
- Business processes transparency increase
- Evaluate the quality of departments, units and particular employee’s work
- Business processes automation and eliminating routine tasks as far as possible
In most cases, implementation of an ERP system is suitable for big companies that include a big amount of workflows with a complex production process, wide selection of produced goods and branch network, just to be able to be aware of everything that happens in the company. Due to the possibility of monitoring all working processes, gaining the whole picture of the company’s functioning in general also becomes more easy.
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ERP Implementation Main Challenges and Risks
Introduction of an appropriate ERP system will bring a lot of benefits to a company in perspective, but it is also connected with certain challenges and risks that will be faced during the implementation process. Therefore there is a necessity to carefully think them over and take into account. The list of the main ERP implementation challenges is below:
- Define Your Business Strategy
To make the first step towards ERP implementation, it’s necessary to determine the strategy your business will adhere to. Well-conceived strategy will help to better understand what functionality your future software should possess. When you just come to a thought that you need a custom ERP system, it seems that there are no unnecessary features, and all of them will be used. But if you start to dig deeper, you will be able to define the functions, your system should perform. That is why inclination to make hasty decisions is one of the main challenges of ERP system implementation.The thoughtful approach will help you to have a better understanding of which features exactly will bring the use and avoid unnecessary expenses for unneeded features.
- Choosing a Reliable Vendor
There are so many options to choose from if you start looking for a suitable software! There is a wide selection of off the shelf solutions that can be used right away just after purchasing a license, hundreds of software development companies offer custom ERP development services. Poor choice of the partner may be a crucial reason why ERP implementation fails. Therefore the searching process of the most suitable solution may turn into a real headache. If you want to gain a high-quality product that would be really useful to your business, your potential vendor must have extensive experience in developing ERP systems, underpinned by positive reviews from previous customers, if you want to avoid the negative experience and prevent undesirable consequences.
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- Technical Side of the Question
Unless you decide in favor of a cloud-based ERP solution, you need to keep in mind that its maintenance of the entire system will be your burden. You will have to take care of the necessary hardware, which needs to be revised, and maybe renewed. There also is the necessity to analyze the internal network, which also may require modernization. The speed of the Internet, access bandwidth — it should be taken into account along with the equipment necessary for ERP system implementation in order to avoid undesirable issues and gain maximum use from its introduction. All these modernizations may entail additional expenses which you have to keep in mind.
- Data Quality
Data migration is another challenge you will have to face when proceeding with ERP system implementation. Companies that transfer their legacy data that had been stored for years to a new ERP software have a risk of incorrect displaying of the data in it. That is why it’s necessary to carefully plan the project before its deployment to gain the overall picture of the potential modifications that the system may require for flawless functioning.
- Proper Training
In order to draw the maximum benefit from the ERP software, it’s not enough for business owners to use the possibilities of the system. It’s also necessary to provide proper training to the staff, so the employees would also be able to use it. Conducting trainings considering the use of the ERP system may be a real challenge, as each team member should be motivated for it.
- Time Required for Implementation
If you make a firm decision to deal with custom software development, you will have to be ready that it will take a long time. Careful planning, searching for a vendor, defining requirements to the future system, its development, implementation, purchasing the additional equipment if needed, providing training to the employees… The list of actions is pretty extensive, but it’s impossible to strike out any point if you want your software to be maximally useful to your business.
Each point listed above entails certain expenses, and the business owner must be ready for it. You should take into account that custom software development itself costs pretty much, and all related expenses are also unavoidable. Therefore it’s vitally important to keep in mind that a serious attitude to the preparatory phase will help you to avoid additional expenses that happen due to poor planning.
ERP software is able to introduce many positive innovations in your business that will facilitate your success. But you shouldn’t forget about pitfalls that are unavoidable if you follow this way. It’s impossible to escape from challenges connected with ERP system implementation, but it’s possible to overcome them successfully. You should remember that careful planning will be able to prevent the unexpected “surprises” and consequences that you will have to solve. If you intend to implement an ERP system in your business and are looking for a reliable partner, please contact us, our team will assist with pleasure.