6 reasons why new ERP software is a difficult decision
The choice for a new ERP system is not easy. As a company, you rarely make a choice with a bigger impact on the organization. Each system has its advantages and disadvantages and the decision you take can have major consequences for the future of the organization. These are six of the most common reasons why the choice for ERP software is so difficult:
1. High costs
Software licenses, investments in hardware and infrastructure, implementation, maintenance and support; no matter which system you choose, the investment in ERP will in any case be significantly. And then you also have to take into account the time spent by your own people on the selection of the system, defining business processes, training and testing, creating documentation, etc.
2. Little experience
You do not choose a new ERP system every year. For many decision-makers, it is the first time in this position or some have done it at most a few times before, but perhaps in a very different time or business. That means you do not know exactly what to pay attention to and what is really important in your choice.
ERP software is comprehensive. You use it to support all or many processes within the organization, and therefore it touches several departments and topics. It is not easy to foresee the impact of an ERP system on the departments separately and the organization as a whole. And apart from the functionalities, there are other complicating things, such as infrastructure or interfaces with other systems.
4. Support and acceptance
An implementation is doomed to fail if there is insufficient support for it within the organization. All departments of the company must stand behind the ERP decision. End users of the system should embrace the system or at least accept it. They will be working with on a daily basis and must see the benefits in the system.
5. Not easy to switch
When you choose an ERP system, then it will not be easy to get back to your decision and take a different direction. You will not want to make the same investment again in the near future. And moreover, as the implementation consumes a considerable amount of time from your staff, you will most likely want to wait a few years before you put them in this process again.
6. Difficult to calculate ROI
The Return On Investment of, for example, a production machine can be calculated fairly accurately. With ERP software it is much more difficult. You can calculate where you expect to start working more efficiently, but many of your calculations will be based on assumptions.
By knowing WHY the choice is difficult, you are halfway there. This knowledge can be used to make things easier for yourself. For example, set up cases to calculate ROI, engage the entire company in the selection to create sufficient support and acceptation and make the tangle of functionalities and features of each system clearer. Then it will remain an exciting adventure, but you limit the risks.
Philip van Kemenade is marketer at Dysel and is in contact with software end users every day.