Knowledge sharing

What are the reasons that make an ERP system ineffective?

June 30, 2021

Many businesses believe that the ERP system is not effective when used in administration, and they still do not know why. This article will suggest to businesses the causes of the ERP system not working as expected, and how to solve it.

1. Business is indecisive

businesses stick to the old system

Ineffective use of ERP is the cause of indecision on the part of businesses because all levels are hesitant to remove the old system. This makes the ERP system not thoroughly effective.

Therefore, businesses need to train quickly and continuously so that the collective and the department can know all the operations. In addition, the documentation needs to be gathered and archived because in case the employee quits, it will take a lot of effort to rebuild from scratch for newcomers.

Note further, business owners and leaders should pioneer to use as an example for all businesses. From there, people will adapt to the new system more quickly.

2. Afraid to learn new things, even user resistance

The habits of employees using the software are difficult to change in a short time. Especially with ERP, the changes are extremely big such as more complex, accurate input requirements, closely linked systems, stages of mutual control, so it will be difficult to modify…

Therefore, the leadership needs to hold a meeting with the key members, tell them the purpose, effect of ERP, and what the challenges are. Therefore, when there is resistance, management needs to find out the cause and solution, or contact the company providing the support solution. However, implementing ERP demands a resolution from the leadership and making sure employees are aware of this.

3. Lack of human resources to take charge

Lack of resources to take care of

Lack of human resources in the project is another cause of ERP failure because the system is operated manually. Therefore, if human resources do not ensure the right factors, perseverance, enthusiasm, it will cause even a good project to fail.

In addition, the lack of infrastructure in enterprises is also considered a cause of poor ERP system performance. For example, the server, bandwidth, and hardware are not qualified for ERP to work effectively.

4. The design model is not suitable

Every business wants to customize and redesign its ERP software to suit its business characteristics. However, if you completely customize the existing system and rebuild it completely, you are breaking the ERP structure and will have to spend a lot of money. Moreover, ERP has been successfully built and applied by leading companies, which means it is a standard with most businesses.

Therefore, businesses have to find a consultant to work with and discuss the governance model they want to implement to see if it is compatible with ERP.

Enterprises should ensure that the process has been agreed upon between leaders and employees because conflicts are easy to arise.

5. Wrong approach

ERP is the overall management software, and businesses must let all departments use it thoroughly. But if the company just wants a new technology system, not a strategic choice, then the failure rate is very high.

Therefore, businesses need to define their goals clearly and need to decide whether to deploy or not. If the management is not serious and careful from the beginning, the implementation will be long and almost unsuccessful.

6. Idealization when implementing ERP 

A common mistake businesses make is not understanding the software they’ve deployed, because they don’t know if the scale is suitable. The reason is that the management has too high expectations that ERP will solve all of their profit issues, or because of over-promising from the service provider.

So, right from the start, both sides are honest and open, properly appreciate the benefits, including the challenges of ERP operation, to avoid disappointment later.

The above suggestions will be valuable information to help businesses review before implementing the ERP system and avoid wastefulness when there is no clear goal. At the same time, businesses can contact BEMO to experience the modules of human resource management, asset management, customer care, sales management system with competitive costs before making a decision.