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Common ERP Challenges

If your organization has grown to the point where its current software systems are no longer adequate, it may be time to consider an enterprise resource planning (ERP) solution. Growth is a good “problem” to have, of course, but keep in mind that change is never easy.

There are several challenges to face between choosing an ERP software solution that meets your requirements and successfully implementing it, which includes getting all your users to adopt the new software. The main challenges, plus tips to help with each, are detailed below.

Difficulty Selecting a Solution 

Selecting an ERP system is no walk in the park – there are numerous factors involved that can make it a lengthy process. ERP software is not one-size-fits-all. You will need to do a thorough analysis of your company’s processes. This is because, even when ERP systems are designed to serve a particular industry or type of business, they offer different functionality and features. That means your organization needs to know exactly what it requires, which features might be nice to have but are not strictly necessary, and which features are unnecessary. The insight gained from the self-evaluation, and an estimation of your projected business growth, will help you determine the features and functions your ERP system needs.

Also, because any new ERP solution should have a useful lifespan of several years, you must also keep an eye to the future: consider your business strategy for the next six to ten years. For example, while you may not need an ERP that can integrate the business processes of multiple locations, but you’re aware the company plans to open another office within the next couple of years, it makes sense to select an ERP that can accommodate that goal.

During your software evaluation project, you will need to go beyond determining parameters such as project scope and pride. There are hundreds of available features to consider as you evaluate your company’s unique needs. This is why it’s important to carefully consider your company’s requirements in terms of functionality in detail during the selection phase.

Completing the work of carefully considering what your company needs now, and for the foreseeable future, is a significant part of the process. The good news is that there are professional services and resources, including functionality lists and other templates, available to help with the selection process.

Technical Challenges 

Deciding on an ERP system that meets your needs is only the beginning of the journey. The implementation of your new system is the next big challenge. The company’s network will need to be evaluated and, potentially, upgraded. In cases of cloud-based deployment, this will include an assessment of internet access bandwidth and speed. Technical questions about mobile device usage may also come into play.

Additionally, you will need to decide between an on-premise and a cloud-based system. On-premise systems are hosted and maintained on-site, whereas cloud systems operate “in the cloud”. Cloud systems are favored for easier implementation and overall cost, but on-premise systems have their benefits too. Further cloud options include software as a service (SaaS), platform as a service (PaaS), or infrastructure as a service (IaaS). This is an important part of software evaluation that requires you to do some further research to determine which type of software deployment makes the most sense for your organization.

Maintaining the Quality of Data 

A major challenge businesses face during ERP implementation is ensuring the quality of the data that will need to be migrated to the new ERP. Old data is often curated on spreadsheets or spread among disparate software applications. The transfer of this data into the new platform can be complicated; ideally, data will be cleaned and consolidated before it is moved to your new centralized system.

To avoid compromising your data, you should run pilot tests during implementation. These mock tests run your new system outputs against the legacy data prior to the new ERP going live throughout the organization.

Securing Employee Buy-In 

User adoption is vitally important with a new ERP system. It is likely some users will be resistant to any new system. It’s normal for people to be somewhat resistant to change, even if the change is positive and makes their life easier – which should be the case with a properly selected ERP. Ensure your employees are included in the selection process. You can do this by assembling a software selection project team that includes a representative from each of the groups that will be using the ERP software. Remember that an executive or an IT expert won’t know exactly what the experience of performing day-to-day work on the new ERP will like, for, say, someone on the production line or a user form human resources; their requirements need to be respected and considered.

Beyond forming your software selection team, it is also important to go about establishing feedback communication channels, keeping all the employees updated on project milestones and progression, asking for their input, setting up engaging training sessions, and praising user achievements.

Managing Process and Cultural Change 

Last but certainly not least is the challenge of how to manage process and cultural changes in the workplace. This is arguably the most important challenge a business faces when implementing an ERP system.

Involve the right people

Implementing an ERP system without a strong selection team could lead to failure. Having the right people assigned to the project ensures all bases are covered.

An ERP project team usually consists of internal stakeholders. These will include subject matter experts (SMEs), opinion leaders, and software system power users. You don’t necessarily want to choose the most senior person from each stakeholder group. That person may not necessarily be someone who will use the software very frequently. Internal stakeholders are key to ERP selection, as they offer industry insight that’s critical to the evaluation process on everything from business workflow to user interface.

Evaluate business processes before implementation

As mentioned under “Difficult Selecting a Solution”, sourcing an ERP system is pointless without the initial research. You need to make sure the software you choose is the best fit for your business. To prevent implementation failure, a business must be fully prepared to adopt the new software being implemented. Normally, processes that need to be addressed are reporting, dashboards, transactions between departments, and other basic configurations specific to your organization’s needs.

Don’t skimp on training

Your employees, especially the “power users” of the system, will need training. Thankfully, software training nowadays consists of self-learning modules, gamified apps, and user-generated training content. Find out what training options are offered by your software vendor or the system implementer.

Ready yourself for negative feedback

It is likely employees will express concerns when it comes to the ERP system and may be reluctant to change. This is one reason you need the support of advocates to remind your team of the long-term benefits of ERP, which include faster, more reliable process workflows; increased accuracy with less tedious manual data entry; real-time reporting that supports improved forecasting and decision making; and easier communication and collaboration between silos.

When both trusted senior executives and rank-and-file members from various departments of stakeholder groups underscore the positive aspects of change, the tone of inclusiveness can go a long way to getting everyone on board.

Being aware of these common ERP challenges will ensure a smooth implementation. Training and including your employees prepares them for the change, undertaking a self-evaluation of the business pinpoints your must-have ERP features, updating your in-place systems will speed up implementation, and a rework of business methodologies will accelerate business. Implementing an ERP system is not without its challenges, but having the right one for your requirements in place offers undeniable business advantages.

Author Bio

Deeana Radley

Business & Technology Writer at Technology Evaluation Centers

Areas of Expertise: Enterprise Resource Planning (ERP) | Customer Relationship Management (CRM) | Business Intelligence (BI)

Deeana Radley is a business and technology writer with over 5 years of industry insight. She has written extensively on technology trends, software solutions and market developments, and particularly enjoys rendering complex topics accessible to beginners.

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