Why ERP Systems Frustrate Users
Enterprise Resource Planning (ERP) systems are powerful software solutions designed to streamline and manage all of a company's business processes in one centralized platform.
While ERPs offer numerous benefits, such as improved efficiency and data integration, they also come with a set of challenges that businesses must be aware of before implementing them.
This article will explore some of the key points that frustrate users regarding the market.
Frustrations:
1. Size and complexity: ERPs are enormous and complex systems designed to incorporate all of your business processes. Extensive customization and modification are required to ensure the software works as intended for your specific needs.
2. Dumb databases: ERPs are sometimes designed to be 'dumb' databases, serving as a system of record for your business. While you don't want to modify the database too much, you should focus on bringing validated data into it. Don't expect your ERP software to perform fancy functions.
3. Implementation challenges: Working with an implementation partner who understands your needs or specializes in your domain is crucial for tailoring the system to your business. However, this process is expensive, and using additional tools can lead to further costs for scoping sessions, implementation fees, development, and usage. Users often struggle with defining their exact requirements, resulting in implementations taking twice as long and costing twice as much as anticipated.
4. Vendor lock-in and pricing: Once your business is up and running with an ERP, vendors may change the pricing structure based on factors such as company size, invoice line items, or simply because they can. Organizations are often reluctant to replace their ERP, as it is considered the backbone of their business.
5. Constant change management: As businesses evolve, ERP systems require ongoing customization to keep up with changing needs.
6. Legacy systems and specialized talent: Most incumbent ERPs are legacy systems, requiring specialized and costly talent for customization and modification. If businesses cannot afford to hire the necessary talent or implementation partners, they may resort to manual workarounds to adapt to their ERP's limitations.
7. Poor support: After the initial sale, ERP vendors often prioritize product improvement for their top clients, leaving others with minimal support. Users frequently turn to online forums and local meetups for shared learning and "ERP therapy."
8. Accommodating efficiency: Users may have specific requirements for applications or workflows but lack the ability to implement them independently.
9. Modules vs. features: ERPs often require purchasing entire modules even when only a single feature is needed, forcing businesses to pay for more than they require.
10. Ecosystem challenges: Implementation partners may take advantage of clients' fear and confusion, promising successful solutions while prolonging engagements to generate more fees. While their services are necessary, it can be seen as a "tax." Choosing a partner recommended by an experienced finance professional or group is advisable.
11. User experience: ERP interfaces are often outdated and complex, requiring significant training for users to navigate effectively, especially for those who are less tech-savvy.
In summary, ERP systems are powerful tools for streamlining business processes and improving efficiency, but they come with significant challenges. These include high costs, constant need for customization, potential difficulties with vendors and implementation partners, and a steep learning curve for users. By understanding these pitfalls and planning accordingly, companies can make informed decisions when considering an ERP implementation and work to mitigate the frustrations experienced by many users in the market.