Are you having trouble breaking down ERP software provider claims and marketing hype to discover the truth about today’s platforms? Are you finding plenty of benefit lists but need an honest discussion about what's lacking?
Knowing the disadvantages or less-than-perfect aspects of ERP solutions helps you set your expectations and become a more informed ERP system buyer and user, so asking for that information is fair.
The problem is that no one in the industry wants to spend much time discussing where solutions fall short. Let’s change that. We’re using our experience as an ERP platform partner, developer, and services provider to share what we think is missing or needs improvement across all ERP solutions.
This article will uncover 8 common ERP software problems and provide actionable solutions to help you navigate them effectively. From data challenges to licensing complexities, we’ll cover it all. First, let’s dive into some general information regarding ERP solutions overall.
First, let’s debunk the myth of ERP software implementation failure
According to our Member Success Director Carl Lewis, the widely held belief that many ERP software implementations fail is overstated.
A failed implementation should mean that the software deployment wasn’t completed. With over 35 years in the ERP software industry, Carl says an actual ERP system implementation failure is rare.
Instead, people often say it was an ERP software implementation failure when what they mean is that they aren’t happy with or didn’t fully adopt or use their system after it went live. Even top-level research sources like Gartner seem to combine project failure with dissatisfaction when reporting their survey results.
Cloudy statistics fail to separate the two.
Still, it’s hard to ignore the statistics that show ERP software satisfaction could be better. What’s at the root of dissatisfaction? In some cases, it is an under-performing or poor-performing ERP solution. In other cases, expectations may be out of line with ERP system capabilities.
Level-setting expectations with the reality that an ERP solution can do many things, but that some things are only possible with intensive resources and time may help improve overall satisfaction.
An ERP system won’t do everything the way you want
There isn’t a silver bullet ERP system for every business—or, honestly, for any business. And that’s the way it should be.
An ERP platform built on core capabilities brings consistency and allows continued innovation.
If you’ve built your business on processes that aren’t mainstream, your perfect ERP platform doesn’t exist. You could pay for customizations to get there, but it won't be sustainable from the standpoint of cost, maintenance, and updates.
A business using niche processes benefits more from changing those processes than looking for or building an ERP system that conforms to them.
What the ERP software reviews say
Before we discuss what needs improvement, we looked at user reviews to better understand common pain points across ERP platforms.
We spent some time on G2 reading reviews about Acumatica, Microsoft Dynamics, NetSuite, and SAP Business One – all considered leaders in the ERP software space. Other sites, like Capterra and Gartner, also offer reviews.
● Acumatica: 4.4 out of 5 stars (1,239 reviews)
● Microsoft Dynamics: 4.0 out of 5 stars (1,594 reviews)
● NetSuite: 4.0 out of 5 stars (3,565 reviews)
● SAP Business One: 4.0 out of 5 stars (516 reviews)
What did we learn from this exercise?
There are definitely some common issues across the one-, two-, and three-star reviews. Complaints about steep learning curves, a lack of features, and a bad user interface can be found for all solutions.
Now that we’ve set some groundwork, let’s look at specific challenges.
1. Why data cleanup is the most critical step for ERP system success
If there’s a single thread that ties ERP software problems together, it’s data. Clean, accurate data is the backbone of any successful ERP system implementation—often the biggest hurdle.
Data should be clean and consistently formatted across all your data sources before importing it into your new ERP solution. It seems backward that you have to rely on manual processes to clean your data before taking advantage of ERP system automation, but there you have it.
As tedious as it can be, this step can’t be skipped or done halfway. Loading bad data into your new ERP software has these impacts:
- Cleaning data during implementation takes longer, potentially costing you more or increasing your project timeline.
- Bad data can shut down processes that rely on it if the data is incorrect or missing.
Take this example: A business has 100,000 customers in its master data. Only 30,000 of those customer records have emails. If those emails aren’t added or those contacts aren’t removed from the master data, that’s 70,000 incomplete records that can disrupt processes. - Bad data can cause user and customer distrust and impact ERP software adoption rates.
Often, customers are unsure where all their data is, what clean data looks like, or how to tackle the project. ERP software developers and providers are not doing a great job helping their customers with this challenge.
Solution: Before you take on an implementation project, complete your data cleanup. Start by identifying where your data is and cleaning it up on the platforms where it resides. That makes it much easier to export and combine into a master data file that is ready for import into your ERP system.
2. How customizations can derail your ERP software implementation project timeline and budget
Customizing your ERP software may seem appealing; after all, who wouldn’t want something that fits “just right.” So why isn’t customizing your ERP platform a great idea?
Several things make customization problematic for most businesses:
- Developers rarely meet a customer’s customization expectations with the first release. With each revision, costs rise, and timelines get longer.
- Managing and updating customizations is an ongoing process with a price tag separate from the ERP platform.
When a business builds a highly customized ERP solution, especially one managed by a single staff member, transitioning to anything else will be difficult.
Over the years, some businesses have had a “mad scientist” who created a monster of an ERP system. When the scientist retires or moves on, where does that leave the business?
Businesses that want to progress should avoid giving the ERP software reins to one person. Embracing change is necessary to leave the past behind. But once you do, a modern ERP solution will position you to scale in the future, with support readily available and maintenance an ongoing process.
Solution: Our advice is to find an ERP solution that gets you 80% of the way there. Then, work with a strong partner who can use personalization and integrations for the remaining 20%.
3. The hidden risks of overly specialized ERP systems
Industry-specific ERP platforms can be found for manufacturing, flooring, food and beverage, and so on. This specialization can bring a deep understanding of how those industries work to the ERP implementation and personalization process.
But there’s a downside, too. Keeping up with industry changes can take up most of a developer’s resources. That can mean improvements are slow and that innovation is lacking.
Businesses migrating away from these “built for industry x” ERP solutions have frustrations around missing capabilities or functions that haven’t matured, usually dealing with reporting and analytics.
We’re not saying industry-specific capabilities are bad—quite the opposite. General ERP solutions also offer these. The difference is that general ERP solutions treat the core capabilities every business needs as the lifeblood of their platforms, with regular updates and advancements.
Solution: Look for an ERP platform with some understanding of your industry and a lot of knowledge of core business functions. Then, look at the ease of personalization and how often updates are made.
4. Decoding ERP software licensing models isn’t easy
If comparing licensing and pricing across your options is causing problems in your ERP solution search, you have plenty of company.
User-based, consumption-based, perpetual…the variety of ERP software licensing structures makes it difficult to get a clear picture.
If you are a seasonal business, your challenges are compounded. Maybe your business makes holiday wreaths, with 10 staff members year-round and 300 during November and December. Your licensing will likely either be inadequate for those two months or overloaded for the rest of the year.
Solution: We can’t bring consistency to an inconsistent situation. Some providers are making improvements for better transparency but are still using different approaches.
For now, the best you can do is understand what a provider’s licensing model means for you initially and when it’s time to renew.
As for the question about seasonality, some providers offer this flexibility. If it’s important for your business, be sure to ask those questions.
5. Cloud ERP software performance issues might be something else
Will moving to the cloud speed up response time? That depends. Moving from an on-premises ERP system or even a lightweight or locally running software program to a robust, cloud-based platform may feel slower in some respects.
On-prem solutions are usually just down the hall. Lightweight programs, especially those running locally, like QuickBooks, use some of the business's computing resources.
On the other hand, a cloud-based ERP solution is built and run entirely in the cloud. This could mean a slight difference in data delivery simply because your data has to travel to the cloud and back, which is farther than a roundtrip to a server room down the hall.
On the other hand, performance issues can indicate that your allocated ERP software resources or internet connectivity could use a boost.
Solution: If the lag is enough to reduce productivity, check with your provider. Upgraded processing power is usually available. As you can imagine, there will likely be a price tag attached.
6. ERP software user interfaces need a modern makeover
There’s no getting around the fact that many ERP solutions have a dated-looking user interface. This seems to go hand in hand with user complaints that navigating these systems is complex and not intuitive.
To some extent, this is a byproduct of developing a robust product with different use cases for various industries. That being said, we agree that more time could be spent simplifying and cleaning up screens and elements to make them more user-friendly.
Will an ERP solution ever be as easy to use as a phone or tablet? Users seem to expect that, but ERP platforms are powerful tools, and simplifying them has limits. Most platforms make it possible for you to declutter your ERP software interface.
Solution: If this issue is important for your users, put this project on your must-have list for providers and partners. Most ERP software allows some personalization of color themes, dashboards, fields, tabs, and menu items. Your ERP software provider or ERP solution partner will know what is and isn’t possible. Consider looking for a partner who will make the updates for you or who can train your team if you prefer to make the updates yourself.
7. ERP training gaps impact users and adoption
Changes to your ERP solution, staff turnover, and new hires mean you will always have staff who need to be trained or retrained. Finding resources to help you can be challenging.
We’re in a remotely connected world where people want immediate access to answers. The days of doing hands-on training offsite are mostly over, but that learning method offered the opportunity for quick questions and answers.
Now, providers rely on video and downloadable documents. A provider offering both is ideal since not everyone learns the same way.
Still, more could be done. Use this as a consideration when comparing solutions or partners.
Solution: There’s no argument that providers could have more resources available. However, provider resources are just part of the answer. Businesses serious about ERP implementation success should build training requirements into user onboarding and continuing education processes.
8. What’s missing in ERP capabilities
No ERP solution will do things exactly as you do without customization. So, should that capability be available on your ERP software? Or is there something about your process that is out of the norm?
For example, many manufacturers using an ERP solution believe project capabilities, preventative maintenance, and document management are missing or lacking. Quality control can also be added to that list.
For ERP providers with capabilities in these areas, some only make them available as an add-on, not part of a core edition.
When individual users claim that a process doesn’t align with basic standards, be a little skeptical. The problem usually lies with something other than the software. It’s more likely that the user has a narrow idea of standard practices or is doing things out of scope compared to others.
Solution: Take an honest look at what you think is missing. Then decide if your process needs to change or if you need to look for a different ERP solution. For providers with some, but not all, of the capabilities you want, check recent innovations in that area. It’s possible they are at a version-one level, with more to come as they work to answer the requests of their user community.
Perfection or progress?
During an ERP implementation project, there’s usually a point where the business needs to decide whether its solution must be perfect at go-live or if a strong foundation optimized and fine-tuned as the system is used is acceptable.
Remember, perfection is rarely achieved. Trying to do so can hold your business back and gobble up your resources and time. ERP platforms aren’t perfect, but the right strategies can help overcome what you see as shortcomings.
Stellar One uses a Rapid Prototyping Methodology to get our members up and running quickly on their new ERP platform. Their membership includes unlimited assistance, training, and personalization. We use their real-world experience to help them fine-tune their platform.
Ready to move your business forward, above and beyond these hurdles? See how you can find the right path without risk or commitment.