Resolving 5 Common Myths About ERP Software
ERP today is understood by more than just Fortune 500s employees. It’s still far from being mainstream, and with that come misconceptions. Here’s a quick look at what we think are the top five.
1. ERP is only for large enterprises
When ERP was invented, that’s exactly who it was for! They were the ones with complex processes and large customer bases that could benefit. Since then ERP has evolved to become accessible to all. Its core proposition is automating processes and eliminating inefficiencies that come from working in silos. There are options on the market today for almost any size of company, in any industry. Cloud ERP software can offer small businesses the ability to transform themselves, providing new opportunities to grow. With the arrival of these, a variety of budgets are served too, bringin us to the second point:
2. ERP is not only expensive but also difficult to implement
Cloud technology or SaaS (software as a service) has dramatically changed what ERP solutions cost. They charge users on usage and cut implementation costs while compromising none of the features that larger, more customized options offer. Some work on subscription models with the cost per user being as little as $5 a day, which means they qualify as an operating expense and not a depreciating investment. With the cloud versions come ease of implementation as well, which can now be achieved in as little as a few days. Even with the more complex versions geared to larger firms ERP has come a long way. More volumes, a lot of early kinks ironed out, more generic versions allowing for customization at a company level and much more sophisticated project management options are some of the reasons that things are cheaper and faster. It all comes down to choosing the right version for you.
3. ERP customizations and upgrades are a nightmare
It’s true that an ERP system will rarely meet all of a company’s needs. Industries and businesses have unique needs driven by markets, supply chains, processes and more. So some customization is often inevitable. However, today many vendors offer easier customizations on out-of-box solutions that can support upgrades. Cloud ERP offers the advantage of being easily upgraded too. In the case of major upgrades, planning, and efficient management is key to minimizing disruption. Most vendors offer support for their current and one previous version of software, allowing companies to feel less forced into an upgrade. The kind of support your ERP provider offers must be one of your criteria for selection to avoid future issues. Which leads us right to the next misconception.
4. All ERP Vendors are equal, and they’re all not to be trusted
This is possibly the most unfair misconception. It’s true that in the past a group of large vendors were the only option available. Today, ERP solutions vary; some are geared for manufacturing, some are meant for supply chain heavy operations, some are for CRM. Look for the ones that best suit your needs in terms of functionality and budgets. Do your research on what’s available. Learn the underlying technology and how well things can scale up to make your business future-proof. Also, check for compatibility with mobile and social platforms and everything else that’s relevant to you. An ERP vendor is a long-term partner, so make sure it’s a well-thought out decision. Look into their market and financial standing, how well they run their business and how loyal their customers are. These are all great indicators of a solid partner.
5. If you get ERP, you have to lose people
A final fear for many companies is that automation brings job losses. There are some cases in which companies have become so large and inefficient with their manual processes and silos that some layoffs are inevitable. That is the exception rather than the rule. The fact is that large layoffs are rarely due to the implementation of IT infrastructure. Rather, the same employees become more efficient and, therefore, have value-added jobs that offer greater learning and advancement. With these greater efficiencies, growth comes with no need to add to existing staffing.
Are there any other misconceptions you encounter in your company? We’d love to hear from you in the comments.
