10 ERP Implementation Challenges Faced by any Organization
Of late, e-commerce platforms are increasingly on the rise, which means that many e-commerce businesses are looking for more ways that will allow them to serve their customers better. As a result, organizations have started looking for technologies and systems that can boost their businesses.
Here is where the ERP system comes in as it makes an organization’s work easier by integrating their financial systems, operations, and even the organization’s supply chain. Therefore, we can say that this system allows an organization to connect all its business operations in a single software.
As much as the ERP system has its advantages, it also has some challenges. Almost 50% of the ERP implementations fails the first time round. These challenges present themselves at different times throughout the implementation process. Some of the challenges that an organization can face when trying to implement the ERP system include;
1) Untrusted ERP Vendors
Vendors in the ERP market have a lot of competition as there are many ERP system programs. Therefore, an organization should be cautious when selecting the system that they need. In addition to that, the organization should consider the types of jobs that the vendor they are buying from has done. If the organization does not consider the above issues, they may purchase a system with problems and does not match the types of operations they conduct. That puts them at risk of losing money.
2) Lack of Commitment from the Top Management
Like any other organization, senior managers are the ones who have the final say in the majority of decisions. Therefore, their interest during the process of ERP implementation is crucial. If the top organizational management ignores the implementation process, the organization could miss out on benefits and delay some procedures.
3) Inadequate Training
Implementation of such systems is likely to be met with some bitterness by employees. The anger is usually motivated by the fact that they are unfamiliar with such types of systems. Therefore, organizations should try and plan training sessions for their employees.
These trainings are aimed at helping them get to know and understand the systems better. As a result, they will be less resentful towards the implementation process. If organizations do not train their employees well, they could never understand and may never know how to operate the system.
4) Insufficient Implementation Time
The process of ERP implementation can take a lot of time because of the complexities of the process. Such complexities require the system to be implemented one step after the other so that it can be tailored to a particular organization for efficient performance. If an organization does not take its time to go through all the necessary steps during the implementation process, it may end up with a system that does not function.
5) Inefficient Project Management
These ERP systems need to be implemented by people who understand how they work. Therefore, organizations need to assign their best employees to handle these implementations. If they fail to do so, the implementation processes might not go as planned, meaning that the results will not meet expectations.
6) Insufficient Implementation Costs
The entire process of ERP implementation is expensive than the acquisition costs. So, before an organization commences the implementation process, they should be financially prepared to handle necessary expenses; otherwise, they may fall short.
7) Lack of Employee Retention
Most employees leave an organization that has implemented the ERP system despite training sessions. If a lot of employees go, the organization can suffer significant losses.
8) Insufficient Testing
If an ERP system is not tested adequately, it might not produce the expected results. Therefore, an organization must test the system adequately to avoid any glitches that will negatively affect the organization.
9) Insufficient Maintenance Costs
Apart from acquisition and implementation costs, an ERP system requires regular maintenance for it to operate efficiently. Lack of care can lead to problems with the system’s operation. Regular maintenances are costly, which in turn increases an organization’s operating cost.
10)Lack of Proper Investment in Internal Hardware
An ERP system requires suitable internal hardware to be productive as its applications need huge storage space. Therefore, proper internal hardware will provide enough space for the system’s applications to run smoothly.
Suitable internal hardware is not cheap; hence the organization purchasing the system needs to make a good investment towards the system’s internal hardware. If they do not invest well, the system will be prone to several software-related issues like viruses. A system with a virus cannot perform well, leading to unproductiveness.
All in all, an ERP system needs to be implemented well to operate well. That means that organizations should try and deal with all the challenges that present themselves throughout the implementation process.