There’s a lot of misconceptions about enterprise resource planning software (ERP).
Most businesses understand the advantages of having a centralized, single source of truth for all their data and a unified system for managing business processes. The organizational benefits of ERP include enterprise-wide integration, standardization of business processes, improved data quality, added accessibility, better organizational visibility and a unified user experience.
On the operational end, ERP also brings enhanced automation, efficiency, real-time operations, improved reporting and advantages like easier regulatory compliance and improved supply chain management, among many other benefits.
Despite these clear advantages, though, many business--especially smaller and medium-sized firms--keep their distance and instead settle for a hodgepodge of siloed systems or homegrown spreadsheet solutions because ERP has a reputation for being costly, hulking and hard to implement.
The downsides of ERP no longer hold, though. With the advent of cloud-based ERP, there’s little reason for businesses to steer clear of these enterprise-wide solutions with such clear benefits.
With that in mind, let’s clear up five persistent myths about ERP systems that hold back adoption.
Myth #1: ERP Costs Too Much
What’s the value of an enterprise-wide system that handles everything from sales, operations, payroll and distribution to inventory, human resources and a company’s supply chain? How about $20,000 per year?
Cloud-based ERP is a lot cheaper than its on-premise counterparts. There’s no hardware or perpetual licenses to buy, and businesses can now implement cloud-based ERP solutions for as little as $50,000 and an ongoing $20,000 in annual subscription fees.
The age of ERP systems that cost millions to implement and even more to support are long gone.
Myth #2: ERP is Too Much Effort
Standard implementations such as those offered by Navigator are turnkey solutions that take industry best practices and largely come configured out of the box. Businesses no longer must approach ERP as a massive custom project with years for rollout.
Solutions such as SAP’s cloud-based Business ByDesign and smaller companies, BusinessOne, take most of the work out of rolling out a new ERP system, when working with the right partner, and businesses now can get up and running in as little as four months, coming away with all the benefits that once were reserved for those hulking on-premise ERP installations that only Fortune 500 companies could afford.
Customization and most of the challenges that used to make ERP lots of work, such as integrations, have now been replaced with standard business processes that are adapted to individual companies via system configurations. ERP no longer requires endless effort to roll out or operate.
Myth #3: ERP is Too Complicated
The cloud has simplified all areas of IT, including ERP.
Just like consumer web services, cloud-based ERP now offers a simple, easy to use web interface that staff can learn quickly and easily. Access also can come from mobile devices just as easily as from an office desktop or BYOD laptop.
On the setup site, rolling out a cloud-based ERP solution also has been greatly simplified by the cloud. Customized solutions have largely been replaced by standard implementations that are built around industry best practices. This means that businesses can take advantage of ERP without having to develop systems, struggle with integrations and build customized modules like in the past.
There also is no hardware and software to maintain with cloud ERP.
Myth #4: Your Company is Too Small for ERP
Don’t be left behind by this misconception; roughly 65 percent of organizations with less than $50 million in revenue use ERP today.
Because cloud-based ERP has eliminated the need for hardware and software maintenance, and businesses can pay for an ERP subscription as a monthly operating expense instead of as a large capital expense, businesses of all sizes now can take advantage of the software functionality that once was reserved for large enterprises.
If your business offers a product or service and has employees, ERP probably is something your company needs.
Myth #5: You Can Get By Without ERP
While this once was true, try staying competitive today without automation, robust customer management in the face of increased privacy regulations, real-time access to your data, analytics, ecommerce support tied to inventory, integrated financial management and things like supply chain optimization and product track and trace.
Your existing hodgepodge of business systems and consumer services might seem like it is working, but look closely and your business probably is falling behind. Just as there will come a day when every business must use artificial intelligence or lose competitiveness, the widespread access to ERP systems today has made the benefits of cloud ERP all but essential for sustained competitiveness.
If you want your business to stay healthy and grow, you need ERP.
So if your business still isn’t using an ERP system or you are running an outdated or on-premise system, now’s the time to move past the myths and embrace it. There was a time when ERP was limited to large companies, and the myths had a basis in fact. But those days are now long gone.
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