The projected growth of the global ERP software market from 2023 to 2033 is expected to see a growth at a CAGR of 11.9% and reach $200.7 billion – indicating a high adoption rate among organizations of various sizes. But ask an experienced Oracle implementation consultant and they will tell you this – ERP implementation is a far more complex process than just integrating a technology.
Global ERP Software Market
Size, by Deployment Mode, 2024-2033 (USD Billion)
ERP implementation requires well-thought-out strategies, detailed preparation, skilled teams, long-term planning, a budget with contingencies, and determined leadership. In simple words, Oracle ERP implementation is about people, processes, planning, and persistence.
The success of an Oracle ERP project is decided only when different teams work together through the numerous challenges that go well beyond the technical aspects of the implementation. It demands coordination among teams, managing the expectations of different stakeholders, and ensuring the users feel confident when using the new system.
Yes, ERP solutions are implemented to eliminate data silos, connect fragmented systems, streamline processes, gain real-time insights into daily operations, inventory, financials, and resource utilization. However, the implementation project can be riddled with challenges if the goals are not defined, if the roadmap lacks details, if the key stakeholders waver, and if the ERP implementation partner lacks experience and expertise.
In this blog, we will dig deeper into some of the assumptions, facts, and realities of Oracle ERP implementation and how organizations can do a reality check to avoid common pitfalls.
What Are the Top 5 Assumptions of Oracle ERP Implementation and a Reality Check
Fact: It is a mix of people and Technology
Reality: There is no doubt that choosing the right ERP solution is essential for businesses, but success depends on the people using the technology and not just the technology alone. According to a survey, 87% of respondents plan to replace or upgrade ERP applications in the next three years because their ERP strategies are not aligned with the company’s expectations. Additionally, 75% of respondents indicated that their ERP strategies did not align well with their overall business goals.
This underscores a key reality – no matter how advanced or best-fit a solution is, it can fall flat if the people using it are not ready for change. Resistance to change, unclear workflows, new systems, or inadequate training can derail even the best ERP implementation if your people are not prepared for it. Make sure the human factor – your teams – are fully engaged and the needs and benefits of the new ERP system are clearly communicated. Only then, your ERP implementation project can be successful.
Fact: Excessive customization can be costly and lead to complexity
Reality: Even though ERP customization may look appealing to many organizations due to their unique business processes, industry-specific requirements, or integration needs, it can increase time, budget, and resource demand, which eventually leads to higher costs and delayed implementation.
Additionally, customized ERP systems can become complex and harder to manage and upgrade which increases the risk of errors and downtime. A finding states that 99% of companies struggle with data challenges, mainly due to the complexity of their systems and difficulties in integrating data. Plus, over customization also has a potential downside i.e., reduced vendor support and risk of vendor lock-in – where reliance on a single vendor makes it difficult to switch to another provider; this can hurt the system ROI in the long run.
Thanks to the vendors like Oracle who offer pre-built industry best practices tailored to meet industry requirements, around 34% businesses have implemented ERP without any customization.
Fact: ERP is not a silver bullet
Reality: Yes, ERP can integrate different systems, streamline processes, and provide valuable insights that can help companies address most of the challenges. But it is not a silver bullet or a magical potion that will solve all the business problems.
Rather to maximize the benefits of ERP systems, organizations need to first identify process gaps, design best workflows, and address the underlying business/structural/administrative inefficiencies before deploying ERP solutions. In simple words, ERP implementation should be seen as a tool for continuous improvement rather than a one-solution that fixes all the problems. This way, organizations can design better strategies and manage expectations for long-term success.
It is always wise to collaborate with experienced Oracle ERP implementation partners like Forsys. They offer end-to-end support including advisory and assessment services, process gap analysis, workflow recommendation, and managed services, and change management to help companies and their teams smoothly transition to the new ERP system.
Fact: ERP costs extend beyond initial implementation
Reality: Companies often think the biggest costs are over once the ERP system is set up. But the truth is that they need to be aware and prepared for other costs as well. Things like keeping the system up to date, customizations, and training people to use the system will continue to cost money. Plus, data migration and change management will also cost money.
So, to avoid any unexpected costs, businesses should plan for these non-technical aspects of ERP implementation. A survey shows that it is a good idea to have a contingency plan and set aside around 15% of the budget for these unexpected costs. This will make the Oracle ERP system remain valuable in the long term.
Fact: Cloud ERP is not a one-size-fits-all solution
Reality: According to this report, while 78.6% of organizations are using cloud-based ERP solutions, 21.4% are still relying on their on-premises systems. Companies are opting for cloud ERPs for features such as scalability, flexibility, data integration, AI, and machine learning. This is a key attraction for businesses who want to be innovative and stay ahead.
Yet, many businesses continue to use their on-premises systems or are going for hybrid solutions – a mix of traditional on-premises and cloud systems. Businesses are choosing hybrid systems for compliance or data security concerns, faster data accessibility, and improved performance. Another advantage of hybrid systems is that they can efficiently store and process large amounts of data using cloud infrastructure. With a growing demand for better end-user experience, hybrid systems are expected to see a rise.
Per this report, 63% of Indian businesses and 46% worldwide have raised their investment in the hybrid cloud. This shows that on-premises ERP systems are still important and not becoming obsolete.
Conclusion
Enterprising solutions like Oracle ERP fusion cloud and Oracle EBS are powerful tools, but achieving success goes beyond just implementing the new technology. It requires a careful balance of technology, people, and processes. It also needs a strong digital strategy that supports your company’s overall goals. Therefore, it is important that all the executives, teams, and stakeholders are aligned with the project because without their support the project can be a success or a failure. Additionally, it is important to communicate about how ERP implementations can change the way teams have been working and how the new system can bring positive changes.
Every ERP implementation project can bring its own challenges. So, do not hesitate to leverage the experience, help, and guide of experienced third parties like Oracle implementation consultants. These partners can help you in defining clear digital strategies and provide other services to keep the enterprising solution smoothly running.
If you are facing any challenges with your existing project, talk to Forsys –an experienced oracle implementation consultant and a reliable partner who is recognized for delivering successful projects on time and within budget.