How to Understand and Conquer ERP System Challenges
Enterprise Resource Planning (ERP) systems have been around for quite some time, and as a result, have accumulated a large number of features and functions to support ever-growing business demands. Unfortunately, intricate systems such as ERP’s do not assist ongoing vendor innovation and new technologies. Even newer ERP systems, designed on new and updated technologies, cannot avoid the already existing complexity that is built within many ERP systems to support complicated business needs. As a result, ERP systems face some ongoing challenges.
Some of the more substantial ones include:
- Hard to use design
- Recurrent complexities
- User experience
The root of these issues lie within both vendors and end users. Over time, vendors have tried to develop some comprehensive solutions by themselves or through mergers or acquisitions that didn’t always offer the best user experience.
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Years ago, ERP systems included vigorous capabilities and did not always respond to the needs of large enterprises. This is why software vendors began to offer customized services to customers who could afford to pay for any custom-made features they wished to add. Consequently, customization led to technical issues because of custom coding and system upgrades.
ERP systems were originally built upon a material requirements planning platform (MRP), which vendors added functionality for finance, sales and purchasing to. As employee and customer management became more important to companies, vendors then included basic human resources (HR) and customer relationships management (CRM) capabilities. However, ERP vendors quickly realized that it would be more efficient to acquire existing “top notch” software products in order to complement their newly specific offerings.
Cloud computing eventually made way for new development in the ERP evolution. The software as a service (SaaS) delivery model was a cutting edge feature in enterprise software, as systems usually relied on configurability. SaaS also offered the ability to extend upgrades to all users of a system simultaneously, streamlining the process for both vendors and users. The cloud led to a new wave of ERP solutions such as NetSuite and Acumatica.
The obvious benefits of the cloud (convenience and accessibility) and the excitement created by the potential of an “ERP awakening” made many companies overlook any long-term challenges of this new delivery system. In fact, a few years later some companies that had been using cloud ERP found out that the total cost wasn’t significantly lower than the on-premise delivery model, even though the initial cost looked better.
The new vendors went out of their way to distance themselves from the original “legacy” ERP systems, such as Workday. Workday markets their products as “an alternative to ERP” when in fact, the structure of the solution is similar to an ERP. Despite the fact that some systems use cloud technologies, vendors are essentially following the same old development model (adding multiple modules to their core ERP product).
No one expects users to fully understand the technical details of a ERP system. They do need to understand how each person’s use of an ERP solution can impact others using it though. The promotion of user understanding relies on finding a balance between business complexity and the embracement of technologies that simplify user interaction, as well as company culture and employee engagement.
When choosing an ERP system, one should keep in mind how ERP has changed and developed over time. Understanding why and how it evolved in this way may shed some light on how to approach these challenges.
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