How to overcome common ERP implementation challenges
Companies are looking for ways to move their processes from paper-based to digital. ERP software helps in this change. However, implementing ERP Software can be time-consuming and when done in the wrong way can be disastrous for your organization.
Implementing an ERP software can be a herculean task, and that is why it is implemented in stages. Should you try to implement it at once, it will lead to confusion and inefficiencies.
Here are some common challenges faced by companies and how to overcome them.
Table of Contents
Finding the right software
It starts with finding the right service provider. This should be an organization that has built a reputation for understanding the needs of clients and helping them make the change to the ERP software. The service provider should have the right personnel to implement these changes. Do your research well and ask for a free trial before you can commit resources to the purchase. While implementing your ERP software ensure you have protected your private network from attacks through a list of 10 best VPNs services.
Even after the company has met with the service provider, it is paramount that there be sufficient testing of the ERP software to ensure that all issues are highlighted and solutions provided. Implementing an ERP software will require collaboration from the top management. These are the people who play a significant role in decision making; their input is invaluable. When the senior management is supportive of the ERP the rest of the employees follow suit.
Once you have purchased an ERP software the next step is training. If top management is not supportive of the software, then the probability of failure is high. Support should start at the top. Employees should be trained so that they become comfortable with the software. Failure to train employees effectively leads to redundancy and inefficiencies.
If you do not budget adequately for the ERP software, you may run into uncontrollable overheads. You need to factor in all your needs during the planning stage. You can break down the implementation into stages with funding for each. Should you choose to purchase different modules from vendors to ensure that they are compatible. Compatibility issues can cause you to discard an existing ERP system. The ERP software will also require infrastructure support. You may be required to purchase faster computers and invest in servers. Since your ERP software will be running most of your processes, you should consider getting yourself good backup systems. A major decision for a company is whether to host it on cloud or locally.
A good ERP system has five components:
- Financial Accounting: this covers your income and expenses. You should be able to know how much you have made through the sale of goods and services. The accounting module should also have cash flow statements, balance sheets and the ability to handle your taxes.
- Manufacture and distribution: this deals with the supply and demand for goods and services. You should be able to see whether you are operating efficiently or there is some redundancy. The module also tracks your stock levels, and you should check any worrying emerging trends.
- Customer Relationship Management: feedback from your customer is very crucial if you are to succeed in any business initiative. The CRM deals with marketing and sales initiative and how clients respond to these. You can know which areas of your marketing plans need improvement and how clients are responding to your products.
- Human Resource and Payroll module: You should have all your employee details in one place. This module takes care of your monthly payroll needs and includes leave management. You can set up overtime hours for employees, calculate taxation, perform appraisals and check your best-performing
- Stock and sales module:you need to manage your stock effectively to make profits. With the module you can check your sales numbers and order more stock should your levels go low. Efficient stock management enables you to never run out of stock. You can budget ahead during high and low seasons.
Benefits of getting an ERP Software
When data is available at a click of a button decisions are made faster and more effectively. The team can identify problems in the supply chain and resolve them before they cause more harm. Finance directors have a better view of the company’s financial health and make changes to meet any targets. Human resource managers have more information at their disposal to make appraisals and recruit to meet demand. Operation managers can view whether the company is operating at full capacity or there is some form of redundancy.
Various departments can have a snapshot of the financial health of a company through the ERP software. In the absence of an ERP, some departments have access to information that is not available to the rest,and this creates bureaucracy when getting approvals. Shared information leads to faster decision making processes. It also prevents the duplication of resources. The risk of errors is reduced because all data is available to all departments.
Transformation of departments
Implementing an ERP can lead to a remarkable transformation of some redundant departments. When you reduce the duplication of resources,you can use it efficiently through streamlining some processes. When you install an ERP system, you enable your employees to focus on more important matters instead of focusing on data entry. The software also gives you a glimpse of what the customers feel about your products. When you launch a marketing campaign, you can know how effective it is by launching the CRM module. Customer feedback is critical for the success of any organization.
The ERP software helps reduce redundancy in an organization. As you reduce the duplication of resources, you can allocate resources where they are needed most. Departments are also able to make decisions faster. The top management can view the financial health of the company at any time. ERP software can challenge to implement,and that is why it is important to search carefully for a provider and implement it in stages.