Why is Early Identification of ERP Limitation Important?
ERP implementation is not simply installing any other software application. It is a time-intensive process that requires extensive analysis of strategies or approaches to ensure the organization gets the most benefits out of it. The notion of providing successful deployment includes seamless integration with existing systems, usability comfort, and scalability to support future demands.
Considering the complexity of ERP deployment, it is very important to not only measure its capabilities but at the same time identify its limitations for rectifying the problematic areas. Otherwise, this might lead to major complications such as inefficient functioning of the software in handling business operations even after spending a huge amount of time and resources.
What Are the Major Limitations of ERP And How They Are Affecting the System’s Adaptability?
The topmost preferred quality of today’s business management software is flexibility and ease of use so that it fairly fits in the current business environment while staying apposite to meet future demands.
It is thus expected out of an ERP system to be an all-in-one business solution that can easily match the processes of a company and has the ability to support extensions, when needed, without any major investment on deployment.
Here are the ten most common ERP challenges:
1. Lack of innovative technology options
Technology innovation is the key to more convenient and more effective, and less expensive business processes.
Modern businesses need best ERP software that are embedded with advanced analytics, artificial intelligence, machine learning or other complex technologies. When your software suite lacks these, it needs to be supplemented with complementary applications from other solution providers to ensure that the companies are able to achieve their business objectives.
2. Does not support integration with third-party applications
Third-party integrations are meant to connect the ERP with other applications in order to extend the core functionality of the ERP system. It makes recording data from multiple entry points and sharing it seamless.
When your ERP system does not provide the more complex or process-oriented capabilities, it requires integration. Without it, you need to enter the same data into multiple systems, leading to incorrect data entry or update. Often huge time and resources are wasted in correcting the mistakes related to duplicate or inaccurate data entry.
3. Complex implementation process
Implementing a new ERP system is a challenging task and needs an ample amount of time. Nevertheless, some ERP software has deep capabilities, and configuring them takes longer than others.
Solutions that are deployed faster are preferred over the ones that take longer implementation time as they need more resources and so entails higher costs. Furthermore, the implementation process might disturb the normal functions of your organization and increases the potential for prolonged unproductivity. More the time, the higher is the risks involved.
4. Inadequate functionality for discrete industry
Although all ERP solutions have strong administrative capabilities, industry-ready systems are embedded with appropriate tools that are needed to fulfil specific business needs and run all operations smoothly. Being domain-specific, these have low customization and maintenance costs and need minimal implementation time.
5. Lack of HCM and CRM capabilities
ERP software is more of an all-inclusive solution that has capabilities to manage every department in an organization.
ERP systems having shortcomings in terms of their ability to handle certain processes need to integrate with other software to gain full business management capabilities and organization-wide control. Implementing it can be resource-intensive and expensive compared to an all-in-one ERP suite.
6. Less embedded analytics and data insights
Analytics and data insights are two important contributors in running a successful business. They help you make accurate demand forecast and enable you to tailor your business operations to achieve them.
ERP software that does not have predictive analytic and reporting capability embedded are unable to know customers’ preference and interest or fulfil them and provide more personalized service to build stronger relationships with them.
7. Not scalable
Scalability of ERP software entails to the system’s ability to adapt, change, and grow along with the business and handle the increased complexities that come along with expansion. ERP system that does not support scalability fails to contribute to the business’s efficiency, competitiveness, and growth potential to maximize profit.
8. Inconsistent technical support
This is more related to vendors than the software. Tech support focuses on fixing user issues, installation errors, and all other technical problems as quickly as possible and help customers use the software more effectively.
9. Restricted deployment option
Many ERP software providers are limited to cloud-only adoptions. This limits their customers to organizations looking for cloud ERP, and they fail to get clients from the segment interested in on-premises or hybrid deployments.
10. High Pricing
Subscription cost plays a vital role in adopting a software solution, especially in the small and midsize market. Despite the ERP software's capability and quality offerings, high pricing often influences the purchase decision, with more businesses leaning towards comparatively inexpensive variants.
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