Why is ERP implementation a challenging task?

Why ERP implementation is a challenging task

Enterprise resource planning (ERP) systems or similar IT packages have become widely used in businesses of all sizes and types for a number of years now. Even small businesses and family-owned companies have joined the mainstream trend of implementing ERP software, with many ERP providers offering solutions just for smaller-sized organizations. ​The ERP trend has become so strong that the vast majority of small- to medium-sized businesses (SMBs) have performed an ERP implementation at least once (some of them twice or even more often). But even though ERP usage is widespread and the norm for most companies of any size these days, there are still challenges for each new implementation, as each organization is different and comes with its own needs, expectations, and processes

An ERP aligns your business processes and helps you to get useful and real-time insights for your business. But, the cumbersome implementation process may be a hindrance, which makes SMEs skeptical to deploy the same. According to a research carried by the consulting firm Gartner, approximately 75 percent of all ERP solutions fail, despite the industry’s focus on delivering the best technology and customer service. But the question arises, why does this happen?

There can be several reasons for the failure of an ERP implementation. And Why ERP implementation is a challenging task?

  • Environment incompatibility: This is one of the prime concerns, of the businesses before implementing an ERP. Some ERP’s works under certain environment and hardware configurations only. Hence, setting up a compatible environment for ERP can involve extra overhead cost.
  • Cost of ERP: Although ERP solution is known to align your business process and assure security of your business data, in some cases, the complexity of the solution requires higher training costs, which can act as a major roadblock becomes one of the major obstruction for SME’s.
  • Lack of communication: If there is no clarity in between the customer and the ERP solution provider, the ERP implementation can fail. In the modern business environment, lack of communication can be one of the major issues for ERP implementation failure.
  • Lack of flexibility: Mostly, deploying an ERP is a one-time investment. So, the solution should be flexible enough to change and scale itself with the growth of your organization. A non-scalable or non-flexible ERP can be a major hindrance to your business expansion.
  • Difficult to operate: Generally, using an ERP can be a little complicated without proper user training. The time spent to understand the product, is directly proportional to the accumulation of non-productive hours, affecting your business revenue.
  • Setting expectations: Every ERP has its own limitations. Setting the right expectation at the beginning is crucial. This will help the stakeholders, to know the functioning of the solution and be prepared for the result accordingly.

Although most ERP systems differ vastly in terms of functionality, scope, and scale, most of these tools share similarities that include a single database, company-wide integration, and real-time operations. They fall under different tiers depending on the size of the business or organization that will use them. These categories include Category 1, which supports large, global businesses, Category 2 for large businesses with limited international presence, Category III for midsize companies and Category IV for small businesses.

 

Although there are several roadblocks for ERP implementation, if chosen wisely, a new age ERP can improve business processes. We at Asterro deliver ERP products that are easily configurable, flexible, scalable and mobile solutions, with a phase-wise implementation methodology.

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