5 ERP Myths Debunked

myth-or-fact ERP has been around for nearly 50 years. Thousands of companies have successfully implemented it during that time, but the same myths come back time and again. Here is the reality behind persistent ERP myths.

Myth 1: Small Companies Don’t Need ERP

Many small and even mid-sized companies still believe that ERP is too complicated for them and that they can run their businesses efficiently without the benefit of an ERP system. While it is possible to run a business with just spreadsheets and hand-written lists, it is incredibly time consuming and error prone—not to mention expensive. The reality is that with an ERP system designed specifically for small businesses, implementing ERP makes business processes more efficient and saves time and effort. With ERP, a small company can compete successfully with larger companies because of the insight and efficiency that ERP brings. There's not reason to shy away from ERP if you're a small to medium-sized (SMB) manufacturer.

Myth 2: An ERP Implementation Takes Years

When ERP solutions were first introduced, implementations sometimes did take years. And they still can—especially if you're implementing a “tier one” ERP solution. But there is no reason that an ERP system designed for the manufacturing industry and targeted to small and mid-sized companies should take more than a few months to go live. Faster implementation results in faster ROI, so it makes sense to move quickly (so long as you don't take too many shortcuts).

Read more about implementations: 5 Simple Steps to Ensure a Successful ERP Implementation

Myth 3: Lean and ERP Don’t Work Together

Small manufacturing companies have adopted lean manufacturing to reduce costs and improve efficiency so they can compete with larger companies. Some lean consultants will say that lean and ERP are incompatible, and the company needs to choose one path or the other. This is not the case at all. At its heart, lean is a management methodology dedicated to increasing efficiency. Many ERP systems include capabilities to support lean concepts such as Kanban, and a business will always need to run MRP for long range planning, regardless of the business management approach they choose.

Myth 4: Integrated ERP Is the Only Way to Go

People sometimes wrongly believe that "best of breed" ERP solutions are inferior to integrated ERP. Best of breed tends to get the reputation that it's going to take costly, custom integrations to get everything working together. But too often, SMB manufacturers settle for an integrated ERP system that doesn't provide all the necessary functionality that is needed and has gaps in required areas. Many best of breed ERP vendors have built-in integrations with popular software programs to offer you the best of all possible worlds—superior functionality and the ability to continue using programs you've already invested in (Top 5 Reasons Best of Breed ERP is Better for Your Business).

Myth 5: All ERP Solutions Are the Same

While most ERP solutions share similar core modules, they differ a great deal. Some ERP systems are designed for multiple industries, so the business processes may include extra steps that don’t make sense in manufacturing, or they may use unfamiliar terminology. Other ERP systems are designed for large enterprises, so the business processes are complicated and require multiple steps and approvals. The best ERP solution for any company is one that focuses on a specific industry and company size because that will offer the best combination of required functionality and efficiency. The solution enables the company to have exactly the modules and functions they need without adding a lot of complex overhead that slows things down.