Given its numerous advantages, enterprise resource planning (ERP) systems, without doubt, are a must for today’s organizations. But knowing the downsides of the program is equally important to ensure that going for ERP is the right step for your business. The principal ERP drawbacks customers may encounter are as follows:
1: Data Security and Mandatory Compliance Obligations
According to available data, since the second half of 2019, there has been quite an upsurge in instances of data breaches worldwide. Hackers have been successful in intruding into corporate networks, inflicting losses amounting to millions. Also, there are many legislation that specifically aim to protect data privacy. SOX, GDPR, CCPA are to name a few. ERP data security, thus, is very critical.
Data security and data privacy are a must in today’s digital world. ERP systems have many vulnerabilities that expose company data, posing threats to data security initiatives. Fortunately enough, there are data security solutions on the market that can give you complete peace of mind with their robust platforms that offer granular visibility and control into users’ data access and usage behavior.
2: The Expenses
You might potentially end up spending five figures on a single license if you want to invest in a conventional ERP scheme. For many, the main downside of ERP applications is by far that. The software’s upfront costs alone can be prohibitively high, especially for small to medium-sized enterprises. Opting for a cloud service, which is usually paid every month, SMBs may reduce the upfront costs.
3: Implementation and Maintenance Costs
Businesses must take into account the personnel costs and the time taken for effective deployment. You may need to recruit additional IT employees, ERP consultants, specialists in software training, etc. Vendors selling conventional systems usually charge a maintenance charge in addition to the license fee. Besides, you would need to invest in new hardware such as servers and compatible mobile devices to support your ERP applications properly. And again, you will need to appoint people to maintain them.
Cloud ERP platform again represents a successful alternative with a usually painless deployment, no hardware, and a minimal need for updates or improvements. Cloud-based software is designed to be undemanding. It is otherwise known as SaaS (Software-as-a-Service). Implementing these systems means logging into any compatible and internet-enabled device; the vendor usually performs the maintenance and updates.
4: Process of Customization
Different organizations have unique needs. Customization is one of ERP software’s strongest adaptive features, but it can easily and rapidly get out of hand. Your software customization takes a lot of time, effort, skills, and resources. But too many companies underestimate entirely how many resources are required and either do not finish their customizations or end up going way over budget.
ERP security systems have various features, but it also means that the platform can be complicated and complex. Companies are not unheard of to get caught up with all the excitement of an ERP solution but fail to prepare for its implementation correctly. Some organizations may find themselves too big and complicated with systems for their operations, leading to low ROI. This is particularly true if you cannot persuade your team because of the difficulty of implementing the program.
Weighing the pros and cons of ERP software is necessary when deciding which platform is right for your company. But it would help if you didn’t let these drawbacks scare you off the positives that could give a significant competitive edge to your business.
Often the benefits of ERP systems outweigh the drawbacks for most businesses. The long-term potential for fully automated business processes and efficiency boosts makes the advantages of introducing ERP systems far outweigh the shortcomings.