Enterprise resource planning (ERP) when properly selected and implemented is more than a piece of software. ERP becomes a strategy to drive profit, improve processes, eliminate waste, and much more. On the flip side though, ERP can sometimes do more harm than good. Below we take a look at the ways ERP implementation can help you, the ways it can hurt you, and how to avoid making serious mistakes in your ERP strategy.
ERP: How it can help
If you work slowly and purposefully through the ERP selection process and choose an ERP implementation partner who is right for the job, ERP will become one of your most critical tools and a main driver of success now and in the future. ERP, when done right, will provide you with the following benefits:
- Elimination of information silos through the integration of your critical systems.
- Elimination of waste with insight and control that allows you to see where you can make changes to cut back on unnecessary processes.
- Standardize business processes for improved service and operations.
- Streamline processes after analyzing the data found in the system to improve your overall efficiencies.
- Drive on-time delivery with increased ability for forecasting and planning.
- Lower inventory levels through better materials management.
- Empowered employees. With the access to real-time accurate data and a 360 degree view of the company they can make informed decisions and strategic calls in their daily jobs.
- Time and money savings are a result from all of the above
- The right ERP system makes you easier to do business with, drive on-time delivery, and increase customer satisfaction.
- Much more
The problem for most people, the reason why they do not see the above benefits from their ERP implementation, is due to selecting the wrong ERP system. Take a look at these 6 common mistakes businesses make when implementing ERP that leads them to miss out on the good and dive straight into the ugly.
ERP: How it can hurt
ERP can do just as much bad as it can good which is why ERP selection and implementation is key to success. ERP implementations go bad for a number of reasons. Some of the most common reasons that ERP projects fail include selecting the wrong system, unrealistic expectations, poor change management, bad project management, and others. Some of the commonly recognized problems associated with an ERP project gone wrong include:
- Budget overages: the wrong choice of partner or solution can lead to more time and money being spent on the project.
- Damage your business: the wrong ERP system will lead to slow downs, bad processes, and other issues that can lead to customer dissatisfaction which will hinder your company’s reputation.
- Slow down operations. An ill-fitted system will not allow you to run your operations efficiently and a long implementation will further slow down your processes and the productivity of your employees across the organization.
- Drive bad business practices. To make up for what the system lacks, employees will come up with workarounds that can result in bad business practices.
- Lack of employee engagement. Your employees will not use the new system if it doesn’t work, if they don’t understand it, etc. You don’t want to dump a ton of time and money into a system that, in the end, nobody uses.
- Longer time period for implementation than you had originally planned for. This will further slow down production and create unrest in the company.
- Not scalable to grow with your business and future unknowns.
We’ve developed these 8 tips to help navigate the many choices for ERP selection.Learn More Here