With the rise of e-business and the need to be more productive, ERP systems are gaining extensive interest from entrepreneurs. An ERP system allows an organization to run a synchronized configuration that connects all the business processes . It helps an enterprise to gain competitive advantage by saving resources and responding to an ever changing business environment. But, there are some challenges that one needs to take into account before implementing an ERP system.
In this competitive environment, selection of the perfect product is necessary to achieve productivity gains. There are over 500 ERP applications in market. While selecting the perfect ERP application for a business, one should know the vendor’s previous projects, industry vertical and experience.
Commitment From The Top Management
Senior managers play a crucial role in any ERP implementation. Their involvement is extremely necessary for the success of a project. Any form of ignorance may cause ineffective decisions and delayed operations.
After the implementation of an ERP system, resentment from employees is common. This could heavily degrade the productivity of processes. Special training and motivation before the implementation is very helpful. This would give the teams, some time to get familiar with the software.
Many companies don’t realize the time consumption of an ERP implementation process. An ERP system is implemented step by step and because it is very standard, it needs to be designed to a particular business, to handle the processes just the way the company needs them.
Proper Project Management
Companies who want to implement the ERP system, need to assign their best employees for successful implementation. Generally companies appoint external help as well but internal employees are preferred.
The entire cost of an ERP implementation is much greater than the initial costs. The total cost depends on customization cost. Greater the customization, higher will be the final implementation cost.
It’s been observed that despite of training, many employees leave the organisation after the implementation of ERP system. This can immensely affect the growth rate of a company.
Testing of ERP system doesn’t mean whether it’s working smoothly or not, but to be delighted by it’s performance and to see whether it’s up to your needs. Insufficient testing of the system can attract costly unplanned updating.
An ERP system has maintenance costs attached to it. If managed casually, it has the power to fracture an organization. It requires time to time maintenance which adds up to the recurring cost.
Investment In Internal Hardware
Working on a slow system can be very unproductive and frustrating. ERP applications require sufficient storage and high work performance. Low investment in internal hardware may result in various software issues.
ERP has gained recognition because of competitive factors, such as an ever-increasing number of mergers and globally aggressive rivals. A successfully planned and managed ERP system can increase customer satisfaction and enhance employee productivity. It can adequately increase the company profits with minimum resources.