Like everything in life, there aren’t only benefits, there are also a few disadvantages of ERP systems.
An ERP system is great, but does not only bring joy and happiness!
#1 – The first few weeks will be chaotic
The first few weeks after the implementation of your ERP will be quite chaotic! Everyone’s learning a new system, the processes have changed and everyone must adapt, all at the same time. If the company is growing fast, it’s even worse.
That’s usually a quite difficult period and for that reason, the go-live should not be given in a busy period. Usually try to fit the go-live of your ERP in a 2 or 3 months window where your business is slower to mitigate this disadvantage of ERP systems.
#2 – It won’t always do what you want it to do
No, you are not the only one in the world using that ERP, like you are not the only using your Toyota.
There are hundreds of thousands of other users. And exactly like you cannot call Toyota and ask them that they produce a car just for you, you can’t modify the ERP exactly how you want.
That means that what was working one way before the ERP implementation has to change, even if it was working well. Let’s say it’s a manufacturing process. That means that you will have to change something on your production lines that was working well or was more efficient. You can ask for a custom development, but expect a hefty bill (see section ‘It’s expensive!’). And sometimes, they will simply answer “sorry, but this cannot be done in the ERP”.
It also means that some employees will have more – or less efficient – work than before. “But it was working so well in the last system, why did you have to change it?”.
That will bring frustration. But it’s usually not that bad when the users feel it brings more benefits than problems. Communication is key here! If it’s a real issue, then a custom development might be in order.
#3 – Your business becomes less flexible
As I said, there are many other businesses using that ERP. While it may be flexible, its still has standard processes to follow. Let’s say that for a process the system has to take a right turn to work, it means that all businesses that use that system will have to go right. Nobody goes left, you neither.
Also, once the ERP is implemented, is much more difficult and expensive to rework it. Like building a house. Once it’s built, it’s much more difficult and expensive to add a third floor or to change the ventilation system. Same goes with an ERP.
To counter that effect, make sure to do a thorough business analysis so that you can limit those problems and plan for the future years.
#4 – You are stuck with this ERP
Another of the disadvantages of ERP is that once you start with one ERP, you are stuck with it. Being such a big project and impacting so many people in the company, it becomes almost impossible to change your ERP vendor after a few years.
That means the purchase of an ERP should be seen as a partnership between you and the ERP vendor, more than a supplier-client relationship. Once the contract is signed, you’re married to them and you are going to give them money for a very long time. Make sure you choose the right partner before you start that journey!
#5 – It’s expensive!
Yes, an ERP is expensive.
You need a considerable upfront investment and you’ll continue paying for yearly maintenance. Employees now have to be paid only to support the ERP and you’ll eventually need more features. And custom development is not cheap.
Disadvantages of ERP – Is it still worth it?
It needs maintenance, you’ll have to invest in it every year and it won’t do everything you want it to do.
With all those disadvantages of ERP, is it worth it?
The answer is: Absolutely!
But only if you put in the effort of making that project a priority during the ERP implementation and if everyone is invested.
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