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ERP Implementation

23 November 2022

ERP Implementation Challenges and Risks

Many benefits come from implementing an ‘Enterprise Resources Planning’ system in your business. These systems automate processes and gather data from all teams into one centralized location, leading to increased productivity and efficiency company-wide. Although an ERP implementation can be complex, it is also challenging because it affects people and business processes across the organization.

This blog will cover some of the most common challenges associated with ERP implementation and how to circumvent them

ERP Software Implementation: What is It?

ERP implementation is a project with multiple phases, redesigning business processes to use the new system better, configuring the software, migrating data for the organization, and training users. Depending on the organization's size, this process may take anywhere from a few months to an entire year. It is typically overseen by a project team that gathers representatives from every functional group within the company.

Why is it a Challenging Process?

Because an ERP implementation strategy affects business processes across the entire organization, it can be complex. To gain the new system's advantages, people frequently have to change their old habits and replace manual processes with more dependable, automated ones.

What are the Challenges Involved in the Implementation of ERP in an Organization?

1. Determining the Processes that Should be Integrated

The first step of an ERP implementation strategy is understanding which processes and systems would run more smoothly with an ERP and which ones would get in the way of your business's workflow. This is especially difficult for organizations with different divisions that compete with each other.

When a company does not have an ERP system, employees waste time collecting data that is split up amongst different spreadsheets and sources. When you merge your systems and work processes with an ERP solution, you can rest assured that there will only ever be one source for all data within your company.

2. Resistance by the Organization's Teams to Change

While the advantages of ERP software implementation are indisputable, it is no secret that people do not usually like change. If you want to replace a system as integral as your current one, you will likely face delays and resistance from your team. In addition, if your team does not grasp the concept of why you are transitioning to a new ERP system, the process will be more difficult.

Before you roll out your new software to your team, make sure to train them properly on how to use it. Instead of stressing the ERP's new features, show your team how it will simplify their daily lives.

3. Lack of Flexibility

If an ERP system lacks flexibility, your company may have to contort its processes for the two systems to work together. Though it may appear daunting and time-consuming, reorganizing your business and retraining your team would be well worth the effort.

By choosing software that meets your company's specific needs, you can avoid any inflexibility or other problems related to ERP implementation.

4. Costs Involved in Maintenance

After the implementation of ERP in an organization, maintaining the system is pivotal to keeping it functioning properly, though it does come at a price. A word to the wise - an ERP system might initially seem inexpensive. However, if you do not meticulously consider the attached upkeep costs before integration, you could pay significantly more money down the line. Another thing to consider is if the software will still be supported after you have already implemented it into your business. You will want to pick a vendor or software partner that can offer support for several years, so implementation benefits your company in the long run.

5. Issues Related to Data Migration

Data migration is a crucial element to consider during an ERP implementation. A problem that sometimes arises is when the data stored in the source system includes both structured and unstructured information. Unstructured data requires more processing and verification to ensure accuracy and authenticity when moving it from the source documents into ERP software. In addition, the more complex the system, the pricier it is to keep up and running.

Sometimes the collation of data into a new ERP is made more difficult as the information does not fall under any specific category. If that happens, the chances of losing data go up. To prevent this, you should plan ahead for the data types you will require for the new system and which ones you currently possess. In addition, if your business needs enterprise software development or modernization of ERP systems, you must partner with someone experienced.

6. Poor Project Management

ERP implementation projects often become an afterthought rather than receiving the best resources and talent. Instead of having company management closely oversee the project, it falls to whoever is available, with little guidance from those in charge. Therefore, poor project management is a significant risk during ERP implementation for any business.

7. The Inability to Redesign Current Processes to Fit the Software

Although trying and making the new ERP system fit the current process may be tempting, this is rarely successful. Instead, the most efficient way to manage your business processes is to purchase an ERP system that can be customized to fit your specific needs.

The sad truth is that neither option is a cakewalk. It is extremely tough in most businesses to change old or existing processes, and customizing the ERP system to fit current processes costs a lot of money and takes up copious amounts of time. This is the most significant risk when implementing an ERP system.

SEIDORMENA – Dedicated to Helping Businesses with ERP Implementation

Launching a new ERP project is a complex endeavor for any given organization. However, improved profits, customer satisfaction, and business growth will make this endeavor worth the investment in terms of time, commitment, and substantial monetary resources. At SEIDOR MENA, we have a proven track record of helping businesses implement ERP systems and transform smart business practices.

Our integrated business management solutions link processes, departments, and functions, enabling businesses to operate more efficiently and effectively. We provide a complete range of services, from consulting and implementation to support and training. Our team of experts has extensive experience in implementing ERP systems and can tailor our solutions to meet your specific needs. Contact us today to learn more about how we can help you transform your business into a smart enterprise.