The Problem with ERP Software

Anyone who’s used any ERP Software or accounting package for more than a few minutes has experienced some level of what we’ll generically label “ERP Software Problems”. Over the next few months, I’ll sporadically explore some of the more common categories of ERP problems that you may have encountered (or that may be in your future), with a view to providing some insider insight into why these problems arise, and how best to deal with them.

In this first look, we’ll examine what’s probably the largest and most costly ERP Software problem: namely, a poor fit. In this unfortunately common situation, a company has implemented a system that is just not a good fit for their business. This may be due to the software itself being inappropriate, but could also be because the ERP Software vendor was not the right choice.

ERP Software Problem: poor fit

 Why do so many companies end up implementing software that is not a good fit for their business? There are many reasons, but the three that I’ve most frequently seen, and that keep recurring, are:

  • Buying based on price, or with a pre-conceived budget – if you make cost your number 1 (or even 2) decision point, you will choose the wrong solution at least 50% of the time, if not more
  • Lack of understanding of your own business needs and processes. If you have a clear picture going into the decision process, of how your business should look after the implementation, you’ll likely choose appropriate software. If not, you won’t.
  • Sweating the small stuff – a corollary of the above point is that it’s the big things that count in this decision, but if you focus on the small stuff you may miss the big stuff. The more detailed features you focus on, without evaluating how important they really are, the more prone you’ll be to either indecision, or the wrong decision.

ERP Software Problem: wrong vendor

Even if you have chosen ERP Software that is potentially a good fit, if the vendor is not appropriate you’re going to have problems. If you work with a vendor that has no experience in your industry, or one that’s accustomed to implementations at companies that are much larger (or much smaller) than you, then the software problems you’ll encounter may well be related to setup, implementation and training rather than the package itself.

Additionally, I firmly believe that there should be a “meeting of the minds” between you and the ERP Software vendor – a similarity in corporate culture and values – as this will result in a truly positive business partnership.

From the perspective of an ERP Software vendor, I can tell you from many years of experience that the fit between ERP vendor and customer is crucial, and works both ways. As a vendor, I don’t want a customer if we are not a good fit for them, at either the software or corporate culture level – in such situations, everyone loses.

In summary, the starting point to avoiding ERP Software problems is to avoid the wrong software, and avoid working with the wrong vendor.

3 Responses to The Problem with ERP Software

  1. [...] week we wrote a post about some problems finding the right ERP software. This week we are going to focus on common problems inherent in the search itself. Let’s begin [...]

  2. [...] next in the series on problems with ERP software: the problem that you don’t know [...]

  3. Improving reporting processes by moving to real-time reporting, and eliminating multiple versions of the truth

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