ERP Systems: Benefits and Challenges

Updated on:
March 27, 2023
New ERP in Your Company

In today's world you have to run as fast as you can just to stay where you are. To move forward, businesses need to grab hold of all possible tools, including IT capabilities. There are more and more of them every year - new development tools, cloud platforms, edge computing, artificial intelligence, etc.

The question arises: how do you effectively implement technological innovations in a company and convince employees to use them? Is there any methodology here?      

What is ERP?

To optimize their work, more and more companies are using ERP systems (Enterprise Resource Planning). This software is used to integrate the management of key business processes, often in real-time, by implementing software and technology.

Such a system allows you to define the company's strategy and track the work of each of its departments. The main task of ERP is to combine all internal processes of the enterprise into one environment, where each participant will have clearly defined duties and responsibilities.

Benefits of ERP implementation 

By using an ERP system, you can manage your business from one place and improve most of its processes. Even though the features of these IT solutions can vary depending on the needs of each business, here are the main benefits of ERP:

  • Creating a unified environment. It allows businesses to speed up internal communication and decision-making, as well as coordinate organizational issues and user requests.
  • Distribution of access rights. Ensures an appropriate level of data confidentiality, and each employee receives only the information to which they have access.
  • Consolidation of financial data. A single information base allows you to track each department of the company and its financial statements. This helps to avoid misuse of funds and control financial flows within the company. 
  • Automation of business processes. Ensures high speed of coordination of actions, distribution of roles, and access rights within the company, as well as operational planning, availability, and reliable data storage.
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The implementation of an ERP system allows a company to quickly facilitate the work of management, speed up the interaction with the leadership, optimize communication between departments, and make financial reporting transparent.

Why do attempts to implement an ERP system fail?

Many companies introduce new technologies into their business processes after months of research and planning, only to be surprised to find that employees are not using them. Here are some of the most common explanations:

  • The technology is too complicated. Because there are so many layers involved in building large ERP systems, they are extremely vulnerable to errors. Such a system can have many functions and modules, and any misconfiguration can have serious and costly consequences.
  • New technology does not integrate with existing software. Anyone would be frustrated by the technology that doesn't integrate well with existing software and applications. This leads to complicated processes that slow down everyone's work and discourage employees from using the new technology.
  • Employees don't understand the value of the new technology. If your employees don't understand the challenges that the new technology you've introduced to their workplace is supposed to address, it won't have any effect.

Although ERP offers significant benefits, you may not realize them if you don't use innovation properly.

Implementation of technologies, especially cutting-edge ones, should start with detailed business analysis, preparation of a detailed implementation plan, and preparatory work within the company. Not only should you consider all the benefits of the project, but also all the possible risks and obstacles that could hinder its success.

How do you start implementing innovations in a company?

Companies often rush to launch new technologies that do not integrate well with their existing workflow. To avoid this, you should first analyze your business and define the tasks that the ERP implementation should solve.

To do this, it is extremely important to understand the scale of the business, production processes, and the principles of interaction between the company's departments. Based on this data, a report is prepared that allows you to plan further work and the terms of reference for implementation specialists.

Key steps for successful integration of new technologies

You can't avoid implementing new processes and additional tools in your business, even if it's difficult. But we'll give you some tips below to make it easier. 

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Make a plan

The more detailed your plan to solve the problem, the better. Therefore, develop a step-by-step strategy on your goals, requirements, and how the new technology can solve them.

Your new software will need to be implemented in stages, which means the following steps:

  • Assessment of all the functional tasks that the ERP is supposed to solve.
  • Explaining to employees the essence of innovations.
  • Creating an implementation team.
  • Appointment of a person responsible for the implementation process.
  • Transfer of data.
  • Training of employees.
  • Pilot launch of innovations.
  • Study the first week/month of using the new system.
  • Providing ongoing technical support.
  • Performance evaluation every 6 and 12 months.

Transferring responsibilities

Transferring responsibility and duties to implement your plan is extremely important. In particular, who will oversee all stages of the company's innovation process? There will be a lot of these stages, and here are some tips on how not to give up during their implementation:

  • Understand the reason for choosing an ERP system. It all starts with a simple understanding of the benefits. This can be done with a personalized presentation, where you can ask questions and see the technology in action to understand its full potential. This is the easiest way to determine if your investment in this system is worthwhile.
  • Don't be discouraged by employee resistance. Launching a new system always takes some time and patience, as it can cause resistance among employees.
  • Make sure your team understands the benefits. Encourage team leaders to emphasize the benefits of the ERP system to each employee individually to ensure that everyone is on board.
  • Involve employees. Companies often make the mistake of introducing innovations without consulting the people who are already using them. Always take into account the advice of your teammates on how to best use ERP.
  • Encourage your colleagues to share their knowledge. No one likes to go through a tedious training course. If you do it right, your employees won't even know they're learning.
  • Provide support. The question "how do I do this?" may surprise you. But this is part of the learning process. Although your new software will contain all the necessary instructions and tips, your employees may still want to seek advice from professionals.
  • Insist on feedback. Your employees' engagement will increase significantly if managers are not indifferent to integration issues. It's also a great chance to develop team leadership.
  • Regularly evaluate the success of the integration. Find out which aspects of the ERP system are of most interest to each team member. Also, determine which workflows have been improved and where time and money have been saved.


Sooner or later, any business faces the need to implement an ERP system to optimize its processes. This is an integral part of the development and scaling of every company, as automation accelerates the pace of production and business promotion.

To make all the innovations easier, make sure you take into account all these factors before implementing new software or infrastructure:

  • Train your employees
  • Personalize training and change its methods
  • Stimulate initiative in the team

This will greatly simplify the introduction of new technologies, but it will not eliminate difficulties. To quickly overcome them, it is better to seek help from time-tested teams of professionals who have many successful cases of solving such problems. 

Understanding this will help you prepare in advance for systemic changes in the company and successfully implement them without losing time, image, and profits.

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