4 Common Misconceptions about ERP Software

Just as with any new transformational technology or software, there are several misconceptions that revolve around Enterprise Resource Planning (ERP) software. Here is a look at some of these in an attempt to dispel them.

Investment benefits accrue from Day 1 with ERP

This is one of the biggest myths that many businesses new to ERP subscribe to. Businesses do certainly experience some of the benefits of ERP from the day of going live. But just as with any major change there are always going to be some teething problems or a learning curve, involved. The biggest challenge with ERP implementation is that no one in the organisation that is outside the implementation team understands how to use ERP.

Despite intensive classroom training, it will take some time for the entire workforce to be confident about making use of the software, on a daily basis, to simplify their way of functioning at work. This is to be expected and should not deter businesses from welcoming the change. 

If you understand PC software, you will immediately segue into ERP expertise

This may be true for a simple ERP solution implemented in a small company, but it is not true of complex ERP solutions. It is reasonable to expect expertise in a single ERP module or even a few. But if the solution is complex with several integrated modules and there is cross functional subject expertise involved, then it can be a little puzzling and take time for a single individual to understand ERP across the board. It is unreasonable to expect such knowledge at the get go.

Only large companies will benefit from ERP

This myth commonly arises from the lack of a clear understanding of what ERP does. The objective of ERP software is to automate business processes across departments in an organisation so that there is as little inefficiency from tunnel vision as possible.

The need for ERP arose because in the past, business processes were optimised for a particular department rather than the business as a whole. ERP today helps to integrate business processes across the organisation, and this works for any organisation, irrespective of size. There are specific Tier I ERP systems meant for a large enterprise that may not suit smaller organisations, while at the same time, there is ERP software made available for smaller companies by Tier III vendors. There is something there for every type of business.

ERP implementation is expensive and takes time

Another common misconception is that most or all ERP software implementations are expensive and can take years to roll out. This is a myth, though there may have been grounds for the belief in the early ERP days and with some of the larger more complex systems.

More affordable ERP is available today because there are a lot of smaller companies looking to implement the new system into their business, and vendors are rising to meet their demands. ERP systems are also more reliable, with early issues having been fixed. These systems are, as a result, implemented within a reasonable period of time. There have also been improvements in project management and less customisation is needed with modern ERP solutions. All of these factors contribute to making implementation quick and affordable. If the process does take too long or turns out to be expensive, it is usually because of poor implementation or poor selection of software.

Clarification of these myths should help businesses hesitant about a big change to make up their minds. ERP offers multiple benefits to an organisation, and with a little patience and understanding of the software, it can bring in significant investment benefits to any business.