5 of the biggest myths about ERP software
In the hundreds of ERP software implementations we’ve overseen, we’ve come across a lot of client concerns that often aren’t true. So, here we are to dispel 5 of the most common myths that abound.
1. Most EPR Implementations “Fail”
One of the biggest concerns those implementing new ERP software have is that it will be a failure. It’s an understandable concern to have when you take the statistics from surveys that report “failure” with ERP systems. Let’s deal with the statistics head-on: In a recent survey by Epicor just over half of respondents rated their ERP implementation as ‘basic’ or ‘average’. The same kind of reaction was found in a survey of SAP users, with 57% of those surveyed believing that they had not had a positive return on investment. You need to delve further than headline statistics to assess the likely success rate in your business. As Ziff Davis point out in their white paper Top 5 Reasons ERP Implementations Fail and What You Can Do About It, “failure is often a perception, rather than a quantifiable measure of outcomes”. The report goes on to say that there are five main reasons at play when some businesses do fail to achieve a meaningful return of investment from their ERP implementation:
- Setting unrealistic expectations at the outset
- Failing to manage organisational change
- Not involving key stakeholders
- Poor project management
- Failure to manage business benefits
Our experience of implementing ERP systems across of a multitude of different industries is the same: so many business believe that implementing an ERP system will fix all their problems. However, they don’t take the time to think about what they want and what they need their business processes to do now and in the future, and then align their software to align with these. In other words, it’s the ERP implementation methodology that’s the issue, not the software.
2. SMEs Don’t Need ERP Systems
Again, we believe in honesty: not every SME requires an ERP system and you should question an ERP consultant that tries to argue otherwise. However, a lot of SMEs have outgrown basic accounting software packages and some sectors almost always require one from the outset. These sectors often have complex operational processes, such as manufacturing, engineering and distribution.Some ERP software (like SAP Business One) is set up with SMEs in mind, especially if you select a cloud-based implementation. The benefits of cloud for SMEs includes:
- The infrastructure costs being pushed from you to the provider
- The ability to easily add extra users
- Predictable monthly costs
- No need for an IT department or heavy software upgrades
- You need to look behind the SME umbrella term and analyse what your business needs.
3. You Only Need to Upgrade Every 10 to 15 Years
Legacy ERP systems were generally updated every 10 to 15 years, but with the fast-paced technological advances in ERP software today you could be missing out on much-needed functionality. If you are stuck with a legacy ERP system that is frequently slow and crashes, is working over maximum capacity or requires spreadsheet work-arounds, then chances are you are due an upgrade.However, upgrading now doesn’t mean a long, drawn-out process – it can now be done in as little as a few weeks (see below) and the focus on continuous development means it adapts to your needs. If you choose cloud-based ERP systems you can also take advantage of automatic software updates and remote working for users.
4. Implementations Take 12 to 18 Months
Yes, implementations can take 12 to 18 months. In fact, the average ERP implementation takes 16.1 months, according to a recent paper in the International Journal on Computer Science and Engineering. However, that doesn’t need to be the case. If you adopt an agile and lean approach to your ERP implementation methodology, your implementation could take as little as a few weeks or months. You can target what will provide you with maximum immediate benefits, while providing flexibility for further incremental improvements that support changing business needs.For example, if you were implementing ERP for job costing, you could get the system in place to assist with the analysis, often the most taxing part. You could keep manual timesheets during the initial phase but then implement web timesheets via mobile devices later on.Freeing up time as you incrementally progress your ERP implementation is fast becoming the gold standard. Just make sure that you’re supported for these changes in the future as part of your ERP implementation agreement.
5. It’s Expensive to Customise to Your Needs
ERP systems don’t often work straight out of the box. They need to be adapted in some way to meet your own business needs. However, most company budgets aren’t limitless and there is a fear that customisation could become a spiralling cost. Thankfully, if you choose a provider that offers industry-standard add-ons these can seamlessly integrate with the upgraded systems. You receive the added customisation you need, but the development cost is effectively shared between customers on a global scale.For example, our ERP software of choice, SAP Business One, has over 500 industry-specific add-ons, such those related to manufacturing, engineering and distribution processes.