Most people do not know the acronym ERP, respectively its precise meaning. It stands for Enterprise Resource Planning and refers to complex corporate software which helps with process automation and comprehensive company management. It contains functions not only for managers, but also for accounting, logistics, manufacturing, HR, marketing and other departments.
The selection of or migration to a new ERP system is a major step in the life of any company. A poor decision in selection, problematic implementation or even the slightest error in the process may have lasting negative consequences.
What are the risks of migrating to a new ERP system?
ERP implementation is not a once-off affair, but rather a long-term relationship between the customer and supplier. Risks may arise in any phase; selection, installation or configuration, as well as operation.
The most common risks when migrating to a new ERP system include:
- exaggerated expectations,
- poorly selected supplier,
- poorly chosen team,
- missing system requirements,
- chosen supplier does not help with implementation,
- insufficient system reaction to changes,
- insufficient customer support.
What exactly do these risks comprise and how to avoid them?
Exaggerated expectations
The decision to purchase a new ERP system is not made in a day. There may be many reasons for unifying corporate instruments into one. For example:
- accounting in a spreadsheet processor no longer suffices for your volume of documents,
- data processing and document creation takes increasingly more time,
- you enter data into multiple systems and these are not interlinked,
- or the existing system lacks the functions you need to develop your business.
An ERP system can solve a number of similar problems. However, it is essential to realise that it is not an all-powerful tool.For instance, it cannot solve issues like your buyers not paying on time or a decrease in customers. For this reason, it is important to have realistic expectations for the ERP system - it serves exclusively to unify data, improve data accessibility and define processes.
Poorly selected supplier
A poorly selected ERP system supplier can mean a lot of lost time, wasted money or paralysed processes. Not every ERP system is suitable for every company. Each one has its own requirements and price limits.
The basic selection criteria are:
- fulfilment of requirements for functionality,
- price,
- customer support from the supplier,
- supplier’s history.
Poorly chosen team
In order to clarify what the company expects from the new system, it must put together an internal team to choose the ERP system. This team must include representatives from all the departments that will be working with the ERP system. The team members must have detailed knowledge of their department and should also be active and communicative. Choose an experienced employee who has been working for the company for some time and knows the defined processes to be team leader.
A diverse team is very important when defining the requirements. For instance, if an accounting representative is missing from your team, there is a risk that the chosen ERP system won’t manage your volume of invoices, or may be unable to cope with specific accounting requirements at the given company.
Missing system requirements
The team must be very thorough when putting together the requirements - each requirement it omits can lead to a poorly chosen ERP system. Together it will compile the functions which are crucial at the present, as well as those that will be needed in the future. It is assumed that the new ERP system will continue to serve you even 10 years from now.
An important factor is to determine the main objectives which the ERP system should serve at the company. For instance, the improvement of specific services. Every department will most likely propose different objectives. You should then choose three to five of the most important ones.
The finalised list of objectives and requirements represents the foundation on which supplier selection will be based.
The chosen supplier does not help with implementation
The system implementer must not leave its deployment up to the customer. A quality supplier will send an implementation team to the customer to help deploy the ERP system.
In addition to helping with the technical aspects, the supplier should also ensure training through a training team. It will show employees how the new system works in order to make the migration as swift and efficient as possible. If the employees at the company change in a few years, a reliable supplier should be able to repeat the training.
System is unable to react to changes
The aim of each company is to achieve growth, a sign of which is the continuous appearance of new needs which bring about changes. If the ERP system is not sufficiently flexible and cannot adapt to these changes, it cannot be used for work in the long term.
Therefore, regular system updates are the basis of its proper operation. As a result, existing functions are improved, new functions are added and the system is also able to react to legislative amendments.
Insufficient customer support
It is impossible to work consistently with the ERP system without customer support from the supplier. This service is offered by every quality supplier as a part of the system. This may be telephone or online support; the goal being that the customer always has somebody to turn to with a request for advice or help. It is important to know when support is available (days and times), in what form it is provided, and whether personal consultations are available.
Enter the world of ERP with our systems
Solitea offers several ERP systems which are capable of meeting a range of diverse requirements. Get to know them:
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