Standing out from competitors is not easy, and investing in a new Enterprise Resource Planning (ERP) technology could turn your dreams into reality.
The best ERP solution generally provides plenty of functionalities, including traceability, quality control capabilities, and management of formulas.
But businesses of any size are afraid to incorporate ERP software into their operation because of high cost, confusing selection process, risks of failure, and difficult implementation.
In this guide, you will know the pros and cons of purchasing an ERP solution and be able to make confident decisions. Without further ado, let’s begin!
What is an ERP Software and How Does it Work?
Probably, you have heard about ERP a couple of times before, so you might be wondering what it is and how it works.
ERP software is simply a tool developed to centralize and streamline the database of companies’ information. Designed with the client’s convenience in mind, ERP makes any routine tasks simple, taking the business process to the next level.
As it optimizes operations, ERP frees up employee time, helping them to focus on other important business aspects. As a result, revenue margins increase while improving communication from all corners of any company.
While there’s a wide variety of solutions to consider, ERP stands apart from the rest because it touches many aspects of a business, including analytics, accounting, customer relationship management, reporting, inventory management, manufacturing, human resources, and more.
Pros
ERP technology has taken the world by storm. Small, medium-sized, and large businesses have switched to ERP software because of its functionalities. Below are the pros of implementing ERP into business operations.
It Allows Businesses to Focus IT Costs on a Single System
One of the advantages of investing in an ERP solution is that it can unify all of your IT costs while improving business efficiency.
In multiple systems, you need to spend resources on infrastructure, dedicated staff, support teams, and other resources.
In an ERP system, on the other hand, you can focus these costs on one solution.
Using a single ERP also minimizes training requirements, especially for end-users, because they don’t need to learn and interact with other applications.
Every Data is Easy to Access
Before, it’s hard to have great access to information in businesses. Things are different today, and purchasing ERP can make a big difference. Data migration, particularly, will be more convenient than ever. Also, every important data will be accessible at any time.
Monitoring inventory levels, for example, can be done regularly. You can also check future consignments and the inventory that’s currently in transit without any trouble.
Effective Reporting and Planning
Aside from focusing your costs on a single ERP system, you would also have a unified reporting system that generates accurate reports or analytics when the need arises. Over time, this allows your organization to analyze and even compare functions across your department while avoiding the inconvenience of multiple emails or emails.
Flexible Modularity
The modular makeup of ERP software is flexible and the majority of vendors provide a variety of applications that organizations can implement together depending on their needs. While some applications are tailored to stand alone, others allow you to integrate them with a larger suite. The implementation of these apps is another advantage. There are two types of deployment, such as thru the cloud and on-premise. In an on-premise system, it is important to purchase and install your choice’s physical software on each company server and computer. In a cloud-based system, on the contrary, a provider handles the bundle off-site.
Achieve a Good Level of Efficiency
Focused IT costs? Total visibility? Effective reporting? Flexible modularity? Name it! Enterprise resource planning (ERP) has them all. What else? An ERP is also a popular tool to reduce both the time and effort required by your department to deal with any activity. When implemented properly, an ERP can scale up manual processes, reducing unnecessary efforts in the long run.
Cons
Similar to other systems, ERP also has some drawbacks. A few of them are highlighted below:
It’s Costly
The major disadvantage of ERP is the cost. Purchasing SAB Business One and other traditional systems, for instance, would cause your organizations a fortune for a single license. But there are cost-effective alternatives, and open source ERP software will be your best bet.
Implementation of Maintenance Requires Extra Expenses
Aside from an expensive license, the implementation would also cost you an arm or a leg. For a successful deployment, it is critical to hire IT staff, training specialists, consultants, and other skilled professionals.
Vendors also include maintenance in their package. But don’t ignore the utmost importance of investing in extra hardware to support your software. A new server and other devices are a wise investment.
The Customization Process is Complex
Let’s admit it! Customizing your software is never an easy task. It requires expertise, financial resources, and time.
It is also a big mistake for businesses to underestimate how many resources are needed to finish their customization. Before anything else, plan out everything. Once you’re ready, you can start customizing your software without too many risks.
It May not be Beginner-Friendly
While ERP software offers plenty of capabilities, we cannot deny the fact that it is difficult to use, especially if you are a beginner. Yes, the implementation is the hardest stage, and proper training should not be ignored. A role-based user training is a decision you would not regret at the end of the day.
Data Migration is Not Simple
Apart from customization, data migration is another problem for businesses. If you also struggle in migrating your data, there are professionals whom you can depend on and trust. While the services might require additional costs, they are worth it.
What’s Next?
It is time to look for ERP software for your business to grow and expand. While there are numerous options to choose from, the trick is to depend on an ERP vendor that’s trusted by many organizations.
If you don’t have an effective ERP or are looking for a safe alternative, there are solutions online that you deserve.
