11 Common ERP Mistakes And How To Avoid Them

In today’s world, your business is up against the best of the best. In order to stay ahead of the rest, you need to have the best business management software.

The way your business collects, stores, manages and interprets data will determine your success or failure. This article will assist you as a business owner in identifying the common mistakes often made and in turn it will help you avoid them.

Leaders in the industry admit that many of the experts in the field of ERP have made crucial mistakes when it comes to selecting, installing and executing an ERP system.

The mistakes that the industry leaders made, have helped in crafting this article. We identified the 11 common mistakes they made when they sought out ERP systems for their business.

1.     Thinking One Size Fits All 

Firstly, one of the biggest mistakes that businesses make is not taking the time to determine the need for business specific solutions. Your business needs to appreciate its uniqueness. Not all ERP systems are built the same and so one size doesn’t fit all so pick wisely. The next few points will help you get it right.

2.     You Don’t Determine Your Need

When you have a growing business and you have limited time, the last thing you want to do is sit down and assess what requirement your business has. The default result would be to take existing structures and make them into the ERP solution.

This is where many businesses fail. They assume that the existing structures will work with an ERP system. The business underestimates the importance of assessment and information gathering.

If you do invest the time to find out what you really need, you can realign your business process and improve your ability to perform and deliver.

3.     The ERP Doesn’t Work for Everyone 

Do you employ one person, 100 people or 10 000 people? No matter the number, every person who will be involved in working with the ERP system must have an input. They must help determine the requirement for the ERP system that will best suit the business and its end users.

Many companies only focus their attention on the top leadership structure when taking inputs on the ERP system requirements. But often these aren’t the true end users of the system.

When all stakeholders are involved in the designing of your organization’s ERP solution, they have an entrusted awareness of the system. This can make them more committed to making it work.

4.     Money, Money, Money

When any business embarks on an exercise of developing and implementing an ERP solution, they need to forecast the financial implications this system will incur. Over and above the initial cost of the system development & design is the ongoing maintenance of the system.

When there’s insufficient capital available to fund the project, the business will resort to a system that’s not designed for their operation and they ‘settle’ for the second or even third best option.

The solution is to budget well and look for a system that matches your needs as well as your financial resources.

5.     Not Considering On-Site Versus Cloud Based ERP 

Every business is unique. There are differences in terms of industry, the platform it trades on as well as the geographical area you conduct your business. Simply because a cloud based ERP works for your competitor, doesn’t mean it will work for you.

If your business has stable and secure internet connectivity, subscription payment system and your employees can work remotely, then the cloud-based ERP solution will best suit you.

The on-site ERP system will best work in a business that has a dedicated IT department or specialist division. This type of system also requires a high amount of start up capital as there needs to be updated servers and in-house hardware.

6.     Paying for Enticing Features You Don’t Need

Features of an ERP system should only assist your business in achieving its desired goal, of performing and delivering a service. Many business owners are dazzled by the impressive array of features that the systems offer. They end up wasting money on features they’ll never use.

What business owners should focus on is:

  • The industry track record
  • Customization options
  • Flexibility and scalability to suit your business
  • Effortless incorporation and integration

7.     Trying to Do Everything at Once

An ERP system is a complex creation to develop and add to your backend. Business owners or IT specialists shouldn’t be concerned with developing and implementing a system all at once. The different parts of the system need to be developed and then assembled piece by piece.

Using a step-by-step process will ensure you have a workable system with the end user involved in each step to make the system efficient and effective.

8.     Not Managing the Change

Every employee needs to feel secure in his or her ability to get the work done. That is why change management is such an integral part of the development and implementation of the ERP system.

If management or the business owner ignores the importance of this aspect of management, they won’t effectively implement the system. Add this element to your timeline during the planning phase.

9.     Not Supporting the Implementors

The employees that implement the system need the support of management. In many cases when the team isn’t supported it results in poor decision making and integration which could eventually lead to a redundant system.

Help them implement and maintain the ERP system now so you have a better chance at success in the long-term.

10.  Communication, Communication, Communication

In both personal and business relationships communication is key to success. You need effective communication between individuals, between departments and within departments.

A priority should be to get the specifics of what is needed in the development of the ERP solution so it serves you well on a continual basis. For this to happen the end users must be empowered to regularly communicate their concerns or opinions.

11.  The Absence of a Maintenance Plan

Throughout this article we mentioned the maintenance of the system. The reason for a maintenance plan is to ensure that the evolving environment and business will be taken into consideration. Without it the system that works to your benefit today may not be relevant in a few months’ time.

Conclusion

The primary focus of any business is successful operation that will ensure its sustainability and growth over the years. If you pick your ERP system for your business, make sure you avoid the 11 mistakes that many business owners and IT specialists made.

If you learn from their mistakes you can experience your success a little sooner than they did.