Having nearly a decade of Odoo implementation experience under our belt, it’s safe to say we’ve encountered quite a bundle of ERP (Enterprise Resource Planning) misconceptions over the years. From what is their actual purpose, to which businesses shouldn’t use business management software; some of the questions we’ve received have made it clear - there are certain ERP implementation myths that businesses believe. So, today, we are here to bust them once and for all.
Myth 1: ERP systems are only for large corporations
This myth is one of the most common ones and, unfortunately, it puts off companies that are in desperate need of a business management solution from acquiring one. This misconception stems from the early days of ERP systems, which were indeed often too complex and pricey for smaller businesses.
Today, however, there are ERP solutions available for businesses of all sizes, including SMEs (small and medium-sized enterprises). The open-source ERP Odoo is a great example of such a software, as it offers numerous apps for a low subscription price, cloud-based deployment, and user-friendly interface. Additionally, the scalability and flexibility of modern ERP systems make them a feasible option for small businesses that are growth-focused.
So, no - ERP systems are not just for large corporations. Companies of all sizes can benefit immensely from them, small businesses may just opt for standard and less complex solutions to avoid the development costs.
Myth 2: ERP implementation takes too long
While it is true that ERP implementation can be a lengthy and complex process, the term “too long” is highly subjective. The duration of the implementation process will largely depend on the scope of the project, including what kind of functionality you need, how much customization you require, how large the company is, and so on… Indeed, the process may be much quicker for a medium-sized manufacturing business with a single warehouse than, say, a global, multichannel organisation with complex industry requirements.
Additionally, the length of the project will also depend on how ready the organisation is for the implementation. It’s not uncommon that the process gets delayed due to lack of collaboration from the company itself or certain issues they encounter (e.g. they are not ready to migrate their data into the new system). With proper planning and execution from both, the implementation and the management teams, the project should be completed on time.
Myth 3: ERP software gets rid of jobs
Many people tend to be resistant to the idea of an ERP software. This is because they are worried it will eliminate jobs through automation. It is true that business management solutions can significantly cut labour costs. However, the most significant ERP cost savings don’t come from getting rid of employees - instead, they stem from increased efficiency and productivity, minimised errors and waste, reduced IT costs through centralisation, higher customer satisfaction, better decision-making, etc...
In the majority of the cases, companies have few to no redundancies as a result of ERP system implementation. The smart ERP solutions help their teams complete their tasks more productively and efficiently, as well as improve the collaboration of the various departments. Automating time-consuming and repetitive tasks allows the employees to focus on more important things, instead.
So, in reality, the only jobs that would become redundant are the repetitive ones with not much skill required, such as manual data entry. Many would argue, though, that such tasks should never be done manually in a modern business anyway.
Myth 4: ERP implementation is too expensive
Similarly to the time it takes, the costs of ERP system implementation are subject to the situation. The amount will vary greatly depending on the complexity / scope of the project, and the size of your organisation. If all a business needs are the standard apps available for the subscription price, the initial investment will be very low. This is especially the case for affordable ERP systems with cloud-based deployment, requiring no in-house servers or hardware.
On the other hand, if you are looking to fully integrate the modules into your business processes as well as develop custom solutions for your unique workflows, this will become a much more substantial investment. This is where a business must calculate the ROI of acquiring an ERP system. Does the increased efficiency and saved costs outweigh the initial costs long-term? If so, is it really too expensive?
The good news is, many ERP systems allow gradual additions of new functionality, meaning you can acquire them as and when you need it. You may start with priority processes and slowly add on others once you have the budget for them.
Myth 5: ERP system is only for the IT department
This one really bothers us. There is a huge misconception that the implementation of an ERP system is only relevant to the IT department. Or, similarly, that only certain departments benefit from it.
ERP software is a set of business tools and its main purpose is to integrate all departments within an organisation. It requires the buy-in and involvement from all levels of the company to be the most effective. The finance team must be involved in the development of the accounting solutions, while the sales department should review the workflows of the CRM system. The seamless integration between all departments is where the success of an ERP software truly lies in.
ERP implementation may not be the right choice for every business, however, the above misconceptions should not be the reason why. We hope that debunking these common myths will help you make more informed decisions on whether a business management software fits in with your long-term strategy.
If you think your business is ready for an ERP system, however, we would love to chat about one of the leading software on the market: Odoo ERP! Book a FREE Odoo demo with one of our experts, and we will walk you through the key functionality of this powerful business management system.