1. No ERP system
Obviously, as an ERP solution provider, you believe in the power of your product. The idea that a manufacturing or distribution organization won't use any ERP software may seem confusing, but this decision isn't always related to a lack of ERP or a misunderstanding of its importance. An enterprise's first foray into ERP often means internal expansion and the need to develop more reliable processes at a corresponding pace.
A 2015 study by a software consulting firm found that two-thirds of businesses that invested in ERP software didn't have any enterprise ERP before they started shopping. Of these buyers, nearly 3 in 10 said growth drove their decision to integrate ERP. Other reasons include improving customer relationship management and making interdepartmental data more transparent to all employees.
That said, in the face of prosperity and scaling up, choosing the right ERP solution for a particular business's future can leave decision-makers in a bind. With so many other things going on, choosing an ERP system that supports all business functions can often overwhelm an organization and lead to a stalemate in the selection process.
2. Disconnect from the third-party software network
Not every business is an overnight success. Organizations that evolve often fall into this pattern, which is a patchwork ERP system made up of many different outsourced software platforms with varying degrees of interoperability. Some people play well with others; Some people don't.
A 2015 study by a software consulting firm found that two-thirds of businesses that invested in ERP software didn't have any enterprise ERP before they started shopping
So what happens when businesses try to take advantage of "Frankenstein ERP"? First, enterprise data channels can be blocked due to incompatible file formats. The inability to share information freely within companies in real-time stifles cross-functional collaboration and may even make it difficult for companies to collect valuable data for tax purposes. In addition, different ERPs can prevent process optimization or disruption of silo plans by isolating data. When organizations are unable to extract as much information as they want from the cache of information needed for analytical purposes or to establish KPIs, they effectively erect an insurmountable glass ceiling. In addition, training employees on multiple heterogeneous interfaces takes time, and the risk of learning human error or tribal knowledge increases with each new system.
3. Local or traditional ERP
"We've always done it this way" are the six most lethal words for any business, and they usually come up at least once in any conversation about an internally developed ERP solution.
These internally created systems, affectionately known as "native" ERPs, may share similar issues with different ERPs, such as lack of access to real-time interdepartmental data. However, almost all of them have a fatal fundamental flaw: they are not built by ERP experts.
At least third-party software developers were involved in designing applications in different ERP systems, even if the enterprise itself pieced them together with varying degrees of success. However, native ERP often lacks features that data-driven companies can't: vendor support, ease of customization, and the inability to integrate valuable third-party software. In addition, indigenous ERP often means data isolation, which limits knowledge sharing. It can also lead to data duplication, which in turn leads to overexpansion of data storage resources.