Common Myths About Enterprise Resource Planning Software

Common Myths About ERP Software

Enterprise Resource Planning (ERP) software is critical for businesses of all sizes. It empowers companies to streamline their operations. It lets you manage everything from accounting and finance to inventory and supply chain management from one place. However, despite its importance, several myths and misconceptions surround ERP, leading to confusion and mistrust.

This blog will explore some of the most common ERP myths so you know what it can and cannot do.

What are common ERP myths we will dispel today?

  • ERP systems are only for large enterprises
  • ERP systems are too expensive
  • ERP systems are inflexible and cannot be customized to a company’s specific needs
  • ERP systems are too complex to implement and use

And more. At the end of this blog, you will be able to make more informed decisions about whether and how to implement ERP software for your business. Let’s get started!

What are Common ERP Myths in 2023?

Even though the ERP adoption rate has increased significantly in recent years, these myths still seem prevalent in the industry.

#Myth 1: ERP Systems Are Only for Large Enterprises

ERP software aims to streamline and automate business processes, which can benefit businesses of all sizes. Large enterprises often have complex requirements and thus may benefit more from advanced ERP systems.

However, small and mid-sized companies can also benefit from implementing an ERP system. In fact, several ERP systems are designed especially for SMBs and tailored to their needs and budget. In addition, these tools often have a lower cost of ownership and are easy to implement.

So, before you come to the conclusion that ERP is only for large companies, search for “ERP systems for small businesses.” You’ll find hundreds of solutions!

#Myth 2: ERP Systems Are Too Expensive

The rise in cloud-based solutions has made ERP systems more accessible to small and medium companies as they don’t need to invest in expensive hardware. Besides, the software is hosted by your ERP vendor. They’re responsible for maintaining and upgrading the system. This eliminates the need for hiring an IT team, further reducing your expenses.

Additionally, many ERP vendors allow you to create a custom plan. This means you can choose the features you want and pay only for what you use. Then, as your business grows, you can add more modules per your requirements.

Another way cloud-based ERP systems reduce overall costs is during implementation. Vendors typically help businesses implement the software instead of on-premise systems, which require hiring third-party ERP consultants.

#Myth 3: ERP Systems Cannot Be Customized to a Company’s Specific Needs

One of the biggest myths about ERP systems is that they cannot be customized to your unique needs. Most ERP systems are built on a modular architecture, allowing you to add new features as needed.

Moreover, many ERP vendors offer customization services or allow you to use third-party SDKs (software development kits) to extend the software’s capabilities. However, it is worth noting that some tools are less customizable than others.

Thus, before choosing an ERP system, it’s critical to assess your company’s specific needs and evaluate how the tool can accommodate them.

Additionally, you can choose an industry-specific ERP that addresses your business challenges with minimum customization. For example, FirstBit ERP construction software in UAE is built for contractors. It has all the features that a business in the construction industry would need, like multi-site and multi-project management, BOQs, cost tracking, and construction estimating & quote creation. 

#Myth 4: ERP Systems Are Too Complex To Implement and Use

The complexity of an ERP system largely depends on the size and complexity of the company, the modules you choose, and the tool’s features. For example, a small business may find a basic ERP system with limited modules relatively easy to use. However, a large enterprise with complex business processes would find implementing an advanced ERP difficult.

However, it is worth noting that modern ERP systems are designed to be user-friendly and intuitive. Besides, most ERP vendors help you train your employees so they can get the most out of your investment.

At the same time, it is important to note that with the right approach and resources, you can implement the ERP independently with no difficulties. All you need is a clear understanding of the company’s needs and a well-defined project plan.

#Myth 5: All ERP Systems Are the Same

No two ERP systems are the same. Even if they have the same modules, they’d be different in more than one way. They vary widely in terms of functionality, the industries they serve, and the specific needs they address. In fact, there is no one-size-fits-all ERP system in the market.

Some ERP systems are geared towards specific industries, such as manufacturing or healthcare, and include functionality tailored to those industries. Other ERP systems offer a broader set of functionality. Therefore, choosing a system that addresses your business needs is critical.

You might also consider the support your vendor offers. For example, are they available around the clock to solve problems? Or can they be only reached via email (that usually takes a long time to resolve issues)?

#Myth 6: Pre-Made ERP Systems Are Not Worth It

Building a custom ERP solution can provide a business with a system tailored to its specific needs. However, pre-built ERP systems have their own advantages and prove to be a better option for most companies.

One of the primary benefits of pre-built ERP systems is that they are already tested and proven in the market. In addition, these tools are used by multiple businesses and have been refined over time to meet the needs of different industries and companies. As a result, pre-built ERP systems are often more stable and reliable than custom-built ones.

Besides, they are often faster and more cost-effective to implement. For example, custom-built systems can take months or even years to develop, whereas you can implement pre-built ERP systems in weeks. And, since cloud-based ERP vendors release software upgrades regularly, you won’t have to worry about bug fixes or maintenance services.

#Myth 7: ERP Systems Are Only Used To Impress Customers

When you implement an ERP system, it can streamline your processes. As a result, it enhances your operational efficiency, leading to increased customer satisfaction. However, the primary goal of an ERP system is not to impress customers.

Instead, they are designed to integrate various business functions, such as accounting, inventory management, customer relationship management, and supply chain management, into one centralized system. This allows for more efficient and accurate data sharing, improving business processes and decision-making.

An ERP system also gives businesses real-time visibility into their operations. This can be used to monitor and improve business performance. For example, an ERP system can provide a business with real-time inventory levels, enabling them to respond to changes in demand quickly.

#Myth 8: ERP Belongs to the IT Department

ERP system is a business tool that requires input and ownership from everyone in the company. Each department contributes to the ERP to streamline the business processes. For instance, if the manufacturing team doesn’t use the ERP, order fulfillment personnel won’t have the right data to update customer order status.

Similarly, if the management doesn’t use the ERP software, they won’t have a comprehensive view of essential business workflows. As a result, they won’t be able to make data-backed decisions to improve the processes.

Thus, we recommend involving everyone in the organization from top to bottom to get the most out of an ERP system.

#Myth 9: ERP Systems Enable Enterprise Resource Planning

No tool can replace humans completely. An ERP software solution only facilitates enterprise resource planning but does not do it for you. Qualified professionals are required to configure and manage the system. Human resources will oversee the tool and ensure everything is aligned with business needs.

Also, even though ERP allows you to automate tedious tasks, several activities still require human intervention. Thus, train your employees to use the software to its full potential, and you’ll see a higher ROI.

Wrapping Up

ERP software helps businesses get a birds-eye view of their operations, optimize workflow, and automate tedious tasks. However, with so many myths around it, like it is expensive and built only for large enterprises, it could be confusing whether you should invest in it or not. Therefore, we have busted the nine most common ERP myths.

Still confused? Shoot questions in the comments, and we’ll answer all your queries!