6 reasons why ERP system is not effective and solutions

Many businesses have known and started applying ERP to management. However, there are still businesses that feel the ERP system is not effective. This article will suggest to businesses the reasons why the ERP system does not work as expected and suggest ways to solve the situation.

1. Enterprises are too attached to the old system

the reason why erp is not effective
Getting rid of the old system and replacing it with advanced technology is what businesses should do. Source: LinkedIn.

Business indecision and hesitation at all levels to remove the old system contribute to the ineffective use of the ERP system. This makes the ERP system not able to take full advantage.

Therefore, businesses need to spend time focusing on training quickly, so that the team and departments can master all software operations. Additionally, the documentation needs to be compiled and archived, so that new employees can start from scratch if the employee quits.

One more note, business owners and leaders should pioneer in using the ERP system to set an example for the collective staff. From there, people will be motivated to adapt to the new system faster.

2. Afraid to learn new things, even protesting

The familiar software usage habits of employees are difficult to change in a short time. This is especially true for ERP software, which requires accurate input and requires close links between the systems; the stages of mutual control should be difficult to modify.

To explain the purpose and great impact that ERP brings, as well as the challenges that go along with it, the leadership should meet with key members of the organization. When there is resistance from employees, management needs to find out the cause and solution, or contact the company providing the solution for support. Leadership and employees need to understand the need for ERP implementation before it can be implemented.

3. Lack of responsible resources

Why erp is not effective
Human resources are a prerequisite for applying ERP to system administration. Source: LinkedIn.

Lack of human resources in charge of the project is another cause of ERP failure. It is impossible for even the best projects to succeed if human resources lack the right factors, perseverance, enthusiasm.

Poor ERP system performance is also attributed to inadequate infrastructure in enterprises. There are problems with the server, bandwidth, and hardware that prevent ERP from working properly.

4. The design model is not suitable

Every business wants to customize and redesign its ERP software to suit its business characteristics. By completely customizing and rebuilding the existing ERP system, you will break the ERP structure and end up spending a lot of money. Additionally, ERP has been successfully built and applied by leading companies, so it is standardized across most industries.

To ensure that a governance model is compatible with ERP, businesses should work with a consultant to discuss it. Companies should ensure that the process has been agreed upon between leaders and employees, otherwise, conflicts are easy to arise.

5. Wrong approach

ERP is overall management software, so businesses must let all departments use it thoroughly and comprehensively. The failure rate will be very high if the business just wants a new technology system instead of making a strategic choice.

Enterprises need to clearly define their goals and need to decide whether to implement ERP or not. Implementation will take unnecessarily long and almost fail if management does not take it seriously and carefully from the start.

6. Idealization when implementing ERP 

Most businesses make the mistake of deploying software in a hurry and not understanding whether the scale is appropriate. Management may assume ERP will solve all of their profit problems or service providers may overpromise.

As a result, both sides are honest and open from the beginning, properly appreciating both the benefits and the challenges of ERP operation, thereby avoiding disappointment in the future.

By reviewing the causes and solutions above, businesses will be able to avoid wasting resources when no clear goal is set before implementing an ERP system. Before making a final decision, businesses can try BEMO’s human resource management, asset management, customer care, and sales management systems with competitive costs.