ERP System Implementation: Critical Factors To Consider
Without a doubt, enterprise resource planning (ERP) programs are a must for today’s enterprises because of their various advantages. But it is important to know the downsides of the software to ensure that to go for ERP is the best step for your company. The key ERP disadvantages that clients can face are as follows:
1: Mandatory Compliance Obligations And Data Security
According to available evidence, there has been a major upsurge in instances of data breaches globally in the recent past. Hackers were successful in intruding into corporate networks, causing losses in millions. There are also several laws that explicitly seek to protect the privacy of data. SOX, GDPR, CCPA, PCI-DSS are just a few of them. ERP data security, therefore, is very important.
In today’s digital world, data protection and data privacy are a must. There are several vulnerabilities in ERP systems that reveal company data, posing threats to initiatives for data protection. Luckily enough, with their comprehensive systems that provide granular visibility and control over the data access and use actions of users, there are data protection solutions on the market that can give you complete peace of mind.
2: The Cost
If you want to invest in a traditional ERP scheme, you might theoretically end up spending five figures on a single license. For many, that’s by far the biggest drawback of ERP applications. The software’s upfront costs alone, particularly for small to medium-sized companies, can be prohibitively high. SMBs can minimize the upfront costs by opting for a cloud service, which is typically charged monthly.
3: Costs Involving Implementation and Maintenance
The personnel costs and the time required for successful implementation must be taken into account by companies. You can need to hire additional staff from IT, ERP consultants, software training experts, etc. In addition to the license fee, vendors selling traditional systems typically levy a maintenance charge. Besides, to better support your ERP applications, you will need to invest in new hardware such as servers and compatible mobile devices. And again, in order to retain them, you would need to nominate individuals.
With a generally painless implementation, no hardware, and a limited need for upgrades or enhancements, the Cloud ERP platform again represents a successful alternative. Technology built on the cloud is designed to be undemanding. Otherwise classified as SaaS, it is (Software-as-a-Service). Implementing these systems requires logging into any compatible and internet-enabled device; maintenance and upgrades are typically carried out by the vendor.
4: The Customization Process
There are particular needs of different organizations. Customization is one of the best adaptive features of ERP apps, but it can get out of hand quickly and rapidly. Customization of your applications takes a lot of time, effort, expertise, and money. But too many businesses completely underestimate how many resources are needed and either do not complete their customizations or end up going way over budget.
5: Complexity
There are different features of ERP security systems, but that also means that the platform can be complicated and complex. Companies are not unaware of being swept up in all the excitement of an ERP solution, but they do not prepare adequately for its implementation. Many organizations can find themselves too large and complex with processes for their activities, resulting in low ROI. This is especially true if, because of the complexity of executing the program, you do not convince your team.
Conclusion
When determining which platform is right for your company, weighing the pros and cons of ERP software is necessary. But if you didn’t let these disadvantages scare you away from the positives that could give your company a major competitive edge, it would help. The benefits of implementing ERP systems greatly outweigh the shortcomings due to the long-term potential for completely integrated business processes and productivity boosts along with comprehensive ERP data security.
