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What does ERP Really Cost?

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ERP implementation is not solely a technical job. A lot of planning and communication is required for success in ERP implementation which should be done in various stages and proper planning should be done before starting the process because failure can result in enormous wastage of effort and money whereas a successful implementation can improve an organization's performance manifolds.

There are many examples of organizations that claim ERP saved a lot of wasteful expenses and automation of processes led to reduction in inventory. ERP improves communication with customer and supplier, which improves organization's credibility and customer base. There are many other challenges faced by technical teams involved in ERP implementation such as
Lack of proper planning and analysis of requirement - Many organizations fail to recognize the needs of the organization before system integration. Each and every minute data should be updated to the technical team to prevent failure caused by lack of information in later stage. Planning the implementation strategies and defining requirements helps in easy system integration.

Poor selection of vendor or package - The first and foremost challenge is to decide about the technology, software and hardware platforms. There are hundreds of vendors available in market that offers products at different costs range and technologies. A system can be implemented successfully only if the selection of vendor is proper. The requirement of software should be analyzed by an experienced team. The organization wishing to implement software should be aware of the strengths and weaknesses of the software or hardware selected for implementation and should try to analyze if the software selected for implementation can meet the needs of the organization.



Sometimes an organization requires only accounting package at the time of installation but later it may need other packages. Future requirements should be analyzed to select a vendor.

Improper project design - The project design should be carefully made to analyze hurdles in implementation. Not designing a proper implementation plan can lead to failure.

Organizations not ready to change - Many employees' in the organization do not want to leave certain original ways of handling software as it has been in use from many years, and they find it easy and reliable. Training should be given to ease the process.

Lack of support from top management - The top management should support the system and also form a project team to support installation to ease the processes.

Unrealistic goals and targets - In system installation it is very important for the organization to set up achievable goals and targets, and do not expect unrealistically from the software.

Poor communication - Poor communication in team members can cause misunderstanding; therefore it is important to keep each and every communication, related to installation on record, as it prevents delays and also helps in completing processes easily and efficiency.

Incompatibility of various applications - The selection of supporting applications should be made carefully as these applications can be incompatible to the original ERP causing errors.

Inadequate training and support - After implementation training should be given to the staff to make it easy for the staff to use the software.





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