The Pegasus: A Horse That Flies !
August 2, 2021
When businesses attempt to get ERP software to manage operations better, they often encounter some common misconceptions. These are so hardened and shared with such conviction, many businesses either end up running their ops on spreadsheet-email-phone framework or start believing that they must build custom software. Let us examine some of these myths
Some of the Common ERP myths
MYTH #1: We are too small for ERP
No business starts big unless you are an oil refiner, where the minimum scale itself is worth a few billion. But, for most others, they must start small and gradually expand and grow into bigger ventures. So, does this ‘we are too small’ argument hold water?
No. This is because the best time to set up systems and processes is when your business is small. At that scale, operations and practices are well understood and it becomes easier to implement an ERP around them. Over the years, these operations and practices will solidify and get strengthened with the constant use of the ERP. Growth happens gradually and the ERP also evolves with that. So much so that the organization will hardly feel growth pangs.
If you or your organization subscribes to this myth, dump it. Waste no time choosing an ERP and be ready for growth.
MYTH #2: ERP needs highly educated people to use it well
This myth, that ERP is not for ‘ordinary folks’, developed in its early days. This is because the big ERP brands spread that notion around. Flashy consultants who spoke jargon and technical terms baffled the user organizations. The real problem was that overly complex software was force-fitted on ordinary businesses. This caused addition of new, winding processes and several layers to operations. Running the ERP became an end. Of course, that also meant that businesses had to hire sophisticated folks to use the ERP.
This myth burst when good, affordable midmarket ERPs were introduced in the market. These kept processes simple, at the same level of complexity as they originally were. They did not scare the users.
In short, ERP software for everyone. You need not qualify
MYTH #3: ERP is a sheer waste of money!
This is a little bit obsolete for the times, though it mattered till recently. Heavy licensing and implementation costs scared the wits out of businesses trying to streamline their operations. The budgets often started at Rs.25 lakhs and went on to touch a crore. Clearly not within the reach of SMEs.
With the availability of ERP on SaaS, a pay-as-you-go or subscription basis has changed everything. There is no capex. You pay only for its use if you please. There is no AMC to be paid, no hardware to be bought or maintained. For most SMEs, the subscriptions will start paying back in only a few months, in the form of clearly defined process flows, quicker decisions, and overall efficiency of operations.
MYTH #4: My accounting software does it well. I don’t need no ERP!
A lot of people confuse routine accounting apps with ERP. What they do not understand is that accounting apps are neither process-oriented nor are they process-driven. They cannot support organization-wide processes, but only some processes such as Sales or Purchasing. They are certainly not designed to handle complex stuff like Manufacturing. They do not support Planning and what-if scenario simulations. Simply put, they are mainly designed to help you maintain your financial books.
Accounting apps can serve you if yours is a tiny business, with sales over the counter or transactions with a limited number of business partners. ERP helps you to be completely systematic, process-centric. Most importantly, it helps your staff to be more productive and efficient.