In 2011, the global market for enterprise software systems was worth an estimated 23.8 billion. By 2016, that number is expected to grow to approximately 32.6 billion, as Statista figures show. With solutions for improving inventory control systems, reducing business losses, and improving invoice turnover speed, there’s no real mystery to the increasing demand for quality ERP programs. When choosing ERP companies however, there is a process to identifying your best partners!
What counts as a “quality ERP program,” however, often depends on the needs of your business. That being said, you need to think not only of the software but of the strength and knowledge of your service organization partner . Just as choosing the wrong software for your company can cost you money and put your company in danger, choosing the wrong ERP companies can leave you up the creek without a paddle.
The Risks Involved with Choosing ERP Software Companies
As Forbes writes, many extremely successful businesses have made the mistake of rushing through the selection process for ERP companies. One of the most famous blunders centers around Hewlett Packard (HP), once one of the most important computer companies in the United States. In 2004, the company made the decision to switch ERP companies, choosing based only on what they thought their new provider could bring to the table. As an unfortunate result, however, HP saw its orders back up, an error that caused 20% of orders to fall out of the system. Without a helping hand from their ERP provider, the company lost consumer confidence and approximately $160 million in revenue.
Although HP’s issues came when jumping to an entirely new system, upgrades, whether large or small, require the same level of support from ERP companies in order for customers to get through without a hitch. Most notably, end users need the support of their ERP service’s project manager to help them through major and minor updates in the system, and to mitigate any issues that might occur. The problem, as you might imagine, is that not every ERP company provides the same level of support through these upgrade periods.
The Benefits of ERP Software Solutions Far Outweigh the Risks
Needless to say, making the wrong decision with regards to ERP companies can cause some serious issues for your company, as companies like HP have shown. With that being the case, it’s only natural for many companies to wonder if they aren’t better off just making a go of it without an ERP provider. The truth, however, is that the benefits of using ERP software far outweigh the risks, so long as you’re smart about choosing a provider. As Business News Daily points out, ERP software can have a revolutionary effect on the strategic value of the decisions you make for your business through the improved data visibility and process integration it provides. If it means making better decisions that can save your company money and make it more competitive, most would say it’s worth the risks.
Has your company had to deal with the fallout from choosing the wrong ERP providers? Share your horror stories in the comments below!
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