ERP Change: The Biggest Challenges and How to Address Them

Changing an ERP system is a decision that can determine the future of a business. It is not just about replacing a system, but a total change in the way internal processes work, from financial and inventory management to customer service and decision-making. If done correctly, it can provide greater efficiency, faster access to critical data, and flexibility that follows the growth of the business. However, if the transition is made without planning, it may cause more operational issues than it attempts to solve, if not accompanied by strategic planning.

But why would a business want to change its ERP system, what are the biggest challenges you are likely to encounter, and how will you address them?

Why should a company change its ERP system?

The reasons why a company might want to change its ERP system can vary. The most common reason is that their existing ERP system no longer meets their needs. As a company grows, processes become more complex. An old or limited ERP can create delays or errors or even miscommunication between departments.

Many more companies want to switch to more modern cloud-based ERP systems in order to gain flexibility, remote access and automation that reduces manual workload. While another strong reason for this change can be the need for better dashboards, connectivity with other applications and real-time reporting.

What are the main challenges when changing ERP and how will you address them?

The process of transitioning to a new ERP system is accompanied by significant challenges, both technical and organizational. Without proper preparation and support, the change can cause confusion, delays, and even data loss. It is important to know what the biggest challenges you are likely to encounter are so that you are prepared to deal with them immediately.

Resistance to Change

The first challenge, which is often underestimated, is people’s resistance to making the change. Employees or even the business owner themselves may view the change to the new ERP system with distrust, as they fear the change. Fear of the unknown, uncertainty and insecurity about whether the change will affect their position, causes resistance to change.

How to Deal with Resistance to Change

The solution to dealing with human uncertainty and fear is, of course, early and honest communication. It is important that employees understand both the reason for the change and the benefits for each individual and the business. Make sure that employees are active members of the transition process and receive the necessary training and support.

The complexity of the transition

As you change your ERP system, there is data migration, integration with other systems, process adjustments, and adoption of new ways of working. This complexity can lead to miscommunication, overlapping responsibilities, or even misapplications, especially when there is no clear strategy or prior experience in managing such projects.

How to make the transition less complicated

The important thing is to start with a realistic timeline. You can also break this big project into smaller stages. Assign trusted people responsible for each stage and ensure proper coordination. Work with an experienced ERP partner to guide you with a methodology and prevent potential obstacles before they even arise.

Data Migration

Transferring data from an old to a new ERP system is a critical and risky process. If not done correctly, errors can occur that will affect daily operations, from inventory to pricing to finances. Furthermore, if the data is disorganized, duplicated, or incomplete, the new system will not be able to function accurately.

How to make data migration smooth?

The first step is data cleansing. It is the process of making sure that there are no errors, duplicate entries or outdated information.

Before the final transition, and since you have of course set a clear timetable, you should proceed with test imports to identify potential problems. This process is made simpler with experienced partners who will help you map all the fields, i.e. do data mapping based on the new system structure.

Unforeseen costs and delays

Despite the organized plan and clear timetable that you may have made for the ERP change, unforeseen costs and extensions may occur. From the additional hours of configuration but also the need for personalized solutions or additional support, the cost can increase from the initial budget. At the same time, if the time has not been properly estimated, the delay in implementation can negatively affect the operation of the business or cause internal turmoil.

How to control costs and time

As you prepare a budget, don’t forget to include the “hidden” and unforeseen costs that may arise, such as employee training, some customizations and testing.

In the same process, set realistic time frames to avoid pressure for quick implementation.

Inadequate ERP user training

No matter how advanced the ERP system you have chosen for your business is, if the people using it do not know how to use it properly then it cannot provide you with all the benefits you want. Inadequate training leads to errors, reduced productivity and ultimately rejection of the new system.

How to ensure proper training

To properly train your staff, it is important to schedule training sessions for all employees. Make sure the training material is clear and tailored to the daily needs of the users. Don’t stay at the theoretical level but combine it with practical application, so that the employees themselves feel secure in handling the new system.

Changing your ERP system for your business may not be an easy process, but with proper preparation and collaboration it can be done smoothly and efficiently. In this way, it will bring great opportunities for your business and bring about digital transformation! See change as a key to success and an investment in the future, not a threat.