ERP & The Big ‘Don’t’

What Not To Do When Implementing an Enterprise Resource Planning System in Any Organization

By: Kimberly Grant

These days, work life is all about data.  How many calls did you make?  How long were those calls?  Were issues resolved?  It can be a daunting task just to remember the minute details.  It can all seem monumental.  Never fear.  There is a software designed to do the work for you.  And, no, it’s not just Excel.  It’s much more.

ERP = Electricity

ERP (or Enterprise Resource Planning) is an understated way of saying: a software that makes getting work done easy when you have a large company.  Some would say that ERP is akin to making sure the electricity is working in your company’s building.  A company can’t thrive without electricity; neither can a company thrive without having a software in place to manage all of its daily activities.  Incidentally, small companies can use an ERP system; as long the company has the cash.

According to Helen Peatfield in her ERPFocus.com article “How Much Does ERP Cost?”, an ERP system can range in price from $150,000 to $750,00; depending on the size of the company.  An ERP system can be a great asset to any company.  Data can be integrated from various functions or departments.  All of your data is one centralized location.  And, data can be updated and integrated in real-time.  There are two things that aren’t so great about ERP systems: 1) it’s expensive, 2) getting the base model is not the best idea.

The Big Don’t

I once worked for an organization that used an ERP system.  Let’s nickname that system “Bolt” (totally fictional title).  This organization decided to upgrade its operating system (or ERP) to the Bolt system.  The organization did not purchase the recommended package that comes with the cloud-based system, customizations, and a team of experts to help with customizing and troubleshooting the implementation of the software.  No, no.  To save money, the organization purchased the base model that was cheaper and just the cloud-based software, which was still quite expensive.

This brings me to the big “don’t”.  Don’t go the cheap route on a system that can basically enhance or degrade your company’s operations.  This base model was confusing for the company’s employees and was plagued with glitches.  These glitches took a long time to fix, because there was no team of experts to help with customization and troubleshooting.

Consequences of the Cheap Route

This organization was plagued with a system that did not work and in order to troubleshoot issues was forced to call a regional office in another country (and time zone). This headache included getting basic questions answered and to help figure out the issue.  This led to a loss in revenue because frustrated customers abandoned the company.  Issues took weeks or months to fix.  And, the pre-set functions had titles that did not match the company’s needs (read: there was no customization).  Therefore, employees were confused when attempting to complete basic functions.  Overall, it took this company four years to fully customize its Bolt system and fix the system’s many glitches.

Cheaper by the Dozen Does Not Equal Gains

If you were to buy a new car, you probably wouldn’t just buy the base model that just has power doors and locks.  You would want to get the extras, like keyless entry and a back-up camera.  Just as in buying a new car, going the cheaper route is not always the best path.  Yes, you’re getting a good deal up front.  But the loss of revenue and your customers will keep the company from any kind of value or volume growth.  Unfortunately, committing the big don’t could results in getting a big disappointment.

Don’t pass up an opportunity to read my previous post.  You can click here for more.