5 Points to Consider Before Implementing ERP System in Your Organization
Given its numerous advantages, enterprise resource planning (ERP) systems, without doubt, are a must for today's organizations. But knowing the downsides of the program is equally important to ensure that going for ERP is the right step for your business. The principal ERP drawbacks customers may encounter are as follows:
1:
Data Security and Mandatory Compliance Obligations
According
to available data, since the second half of 2019, there has been quite an
upsurge in instances of data breaches worldwide. Hackers have been successful
in intruding into corporate networks, inflicting losses amounting to millions.
Also, there are many legislation that specifically aim to protect data privacy.
SOX, GDPR, CCPA are to name a few. ERP data security, thus, is very critical.
Data
security and data privacy are a must in today's digital world. ERP systems have
many vulnerabilities that expose company data, posing threats to data security
initiatives. Fortunately enough, there are data security solutions on the
market that can give you complete peace of mind with their robust platforms
that offer granular visibility and control into users' data access and usage
behavior.
2:
The Expenses
You
might potentially end up spending five figures on a single license if you want
to invest in a conventional ERP scheme. For many, the main downside of ERP
applications is by far that. The software's upfront costs alone can be
prohibitively high, especially for small to medium-sized enterprises. Opting
for a cloud service, which is usually paid every month, SMBs may reduce the
upfront costs.
3:
Implementation and Maintenance Costs
Businesses
must take into account the personnel costs and the time taken for effective
deployment. You may need to recruit additional IT employees, ERP consultants,
specialists in software training, etc. Vendors selling conventional systems
usually charge a maintenance charge in addition to the license fee. Besides,
you would need to invest in new hardware such as servers and compatible mobile
devices to support your ERP applications properly. And again, you will need to
appoint people to maintain them.
Cloud ERP platform again represents a successful alternative with a usually painless
deployment, no hardware, and a minimal need for updates or improvements.
Cloud-based software is designed to be undemanding. It is otherwise known as
SaaS (Software-as-a-Service). Implementing these systems means logging into any
compatible and internet-enabled device; the vendor usually performs the
maintenance and updates.
4:
Process of Customization
Different
organizations have unique needs. Customization is one of ERP software's
strongest adaptive features, but it can easily and rapidly get out of hand. Your
software customization takes a lot of time, effort, skills, and resources. But
too many companies underestimate entirely how many resources are required and
either do not finish their customizations or end up going way over budget.
5:
Complexity
ERP
security systems have various features, but it also means that the platform can
be complicated and complex. Companies are not unheard of to get caught up with
all the excitement of an ERP solution but fail to prepare for its
implementation correctly. Some organizations may find themselves too big and
complicated with systems for their operations, leading to low ROI. This is
particularly true if you cannot persuade your team because of the difficulty of
implementing the program.
Conclusion
Weighing
the pros and cons of ERP software is necessary when deciding which platform is
right for your company. But it would help if you didn't let these drawbacks
scare you off the positives that could give a significant competitive edge to
your business.
Comments
Post a Comment