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blog | April 20, 2020

Five ERP Myths

If you search the internet, you will find millions of articles on what an Enterprise Resource Planning (ERP) software is, what it includes, reviews of different providers, and much...

By Courtney Perry

If you search the internet, you will find millions of articles on what an Enterprise Resource Planning (ERP) software is, what it includes, reviews of different providers, and much more. While it can be overwhelming, it is important to note that a lot of information is also inaccurate or written from a point of bias. These incorrect pieces, or what I would like to call myths, can be a serious issue if you start an ERP project with the belief that they are fact. So, let’s review five ERP myths that you should be aware of.

 

1. It’s better to start with a simpler package and then merge those into a full ERP later.

At first thought, this makes perfect sense. Get something like a standalone accounting or inventory tool to tackle on pain point. From there, add on. However, in the long term, there are a lot of issues that may arise when going on this route. In the future, you will likely want to buy a brand-new ERP that handles everything. Meaning, you will have to do a new round of training on the new system. Also, the money you spent on the first system was now for nothing. It would be time and cost efficient to start with a full ERP and choose less modules to keep the costs down.

 

2. Any ERP that is in my industry will be a good for my company.

Within the ERP world, many solutions are built for a specific industry like manufacturing, retail, and banking. If you are a manufacturer for example, do not trust that any ERP labeling themselves as a system built for manufacturing companies will be a good fit. All these industries have such a variety of difference in how they operate, you absolutely need to take a closer look at a provider’s current customers, areas of expertise within the industry, and list of modules.

3. An out of the box ERP is all I need; I do not need to spend money on configuration.

This one also at first glance seems plausible. Save money on the implementation by taking the system out of the box and adjusting to it from there. This, however, is a terrible idea. Not only will you get frustrated trying to adjust your process, but in general, ERP systems are built to be tailored to a company. It will save many headaches, and it is something your provider can do much easier than you can.

 

4. On-Premise is a thing of the past. Everyone is doing the cloud deployment.

While many companies are going to the cloud, on-premise is certainly not a thing of the past. For companies that have strong IT departments or work within an industry that requires heavy compliances like government contractors, on-premise is a great option and sometimes even required. Hosting all your own data on an on-site server appeals for a variety of reasons including long term cost savings, enhanced security, and peace of mind about data storage.

 

5. ERP vendor support is not a top priority compared to the purchase process and implementation.

Companies as familiar as Nike, HP, and Hershey all had successful ERP implementations, but eventually failed because after the initial implementation, everything collapsed. Poor support, poor management, and a lack of clarity on next steps all led to the ultimate end, costing hours upon hours of time and hundreds of thousands of dollars.

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