Overcoming challenges in implementing an ERP system in the pharmaceutical industry

The pharmaceutical industry being the most important life saving industry is a heavily regulated and complex industry. It involves extensive research and development, strict regulatory compliance, complex formulations, and a complex supply chain. 

To overcome these challenges and gain operational efficiency, the industry requires a robust enterprise resource planning system i.e. ERP. ERP systems help the organization to streamline their operations, improve efficiency, and achieve regulatory compliance by lowering operational costs, time and energy. The ERP systems automate the company processes and gather data from all departments into one centralized platform.

ERP provides dedicated modules for each department of the company like procurement module, sales module, production management, inventory management, asset management, supply chain management, warehouse management and finance module. ERP can be deployed in three ways i.e. on-cloud, on-premise or a hybrid model.

But implementing such a big and strong system in a pharmaceutical company can be a daunting task. There are some certain challenges which companies face while implementing an ERP system in their organization. These challenges also depend on the type of ERP system deployed.

Further in this blog we will come across the most common challenges faced by the pharmaceutical companies in implementing ERP and  how to overcome them. 

Before that let’s have a quick view of the challenges faced during the selection of an ERP system:

Challenges faced by companies in selecting the ERP system:

• Defining and framing your requirements for ERP, from every department.
• Set your SMART goals and objectives for ERP.
• Uncertainty related to the future ahead of 10 years.
• Looking and researching about the ERP vendors.
• Selecting the right ERP features that meet your requirements.
• Negotiating the best deal with the ERP vendor.

After selecting the desired ERP system and the vendor, comes the task of implementing the system in business, which can be a hectic task, as ERP has a huge operation and it affects both people and the business operations. People get affected as they are needed to change their old habits and replace the previous processes with the more automated platform.

Most common challenges faced by pharmaceutical industry in implementing ERP system are:

1. Regulatory compliance: Pharmaceutical companies are subject to strict regulations from various regulatory bodies and also the government. They are compliant to follow the set guidelines to ensure product safety and effectiveness. Implementing pharma ERP software which meets the compliances can be a complex and time consuming process.
   
2. Data Management: Pharma companies create a large amount of data throughout their operations during research & development, medicines formulations, dealing with antidotes, sales, distribution and procurement of raw materials. All these data are critical for the pharma industry and need proper attention, security, clinical trial, data mining and analytical reporting tools for forecasting, developing new formulations and efficient decision making.

This critical data can be a challenge to manage appropriately. Thus it is important to ensure if the ERP system has the ability to handle large volumes of data and can provide real-time access to critical information.

3. Integration with Legacy Systems: Many companies operate on legacy systems that have been in use for many years. These systems may be outdated or incompatible with modern ERP systems. Thus there is a challenge to integrate these systems with new ERP software. And the integration, collection of huge data from all sources and maintaining its quality is a tricky and lengthy process.
   
4. User Adoption/ change management: For the success of ERP implementation user adoption is critical.  In the pharmaceutical industry, user adoption can be particularly challenging due to the complex nature of the industry and the various stakeholders involved. . Effective change management is critical to ensure a successful implementation.
   
5. Security and Data Privacy: Pharmaceutical companies deal with sensitive information, such as patient data, clinical trial results, and intellectual property. Ensuring the security and privacy of this information is critical. Thus the ERP must be secure and must provide related  features.

During implementation it can be a challenge as it requires extensive data migration, which can increase the risk of data breaches.

6. Scalability: As pharmaceutical companies grow and expand their operations, their ERP system needs to be able to scale and meet the demands of the business. This can be a challenge, particularly for smaller companies that may not have the resources to implement a large-scale ERP system.
   
7. Commitment and training: For ERP implementation full commitment of the key stakeholders are required. They must take out sufficient time to implement and understand the operations. Further proper training sessions should be provided to the employees, to better know the ERP operations and make them confident enough to deal with the new software system.

Other than these major challenges organizations also face challenges like finding supportive vendors, getting customizations done, budgeting etc.

While ERP is necessary for running the business smoothly, one can overcome these implementation challenges with some  preventive measures.

Let’s go through the different ways to overcome the above mentioned challenges:

1. Conducting training sessions: Before implementing an ERP system, proper sessions should be conducted with the employees to clear their doubts and make them understand the need for the new system. They should be confident enough to welcome the new system and should not oppose the change.

The employees should not be stressed about the new ERP features rather they should be knowing how it will help them simplify their operations and daily tasks. Thus there is a need to plan a proper program and communicate the best. 

2. Choosing the flexible software: While selecting your ERP system, conduct research and adopt the system which fulfills your business needs and is quite flexible to work with the existing systems. It should meet your company’s specific needs to avoid any inflexibility & problems related to implementation.
   
3. Defining goals and objectives: Planning well defined SMART Goals and objectives can help overcome the implementation challenges of ERP. One needs to understand where they are standing and where they want to be. The organization must be clear with their thoughts on what they need from their new ERP system.
   
4. Testing and verification: Before going live with the new ERP system, the management should test and verify its operations. The testing will help to identify any potential problem, system failures, data corruption, and disrupt operations.
   
5. Project management and planning: Strong management is required, including realistic expectations, and two way communication with the upper management.

Well planned integration ensures on time and on budget project implementation.

Conclusion: 

If implemented correctly, a business can overcome the implementation challenges of ERP and can drive business profitability, real time transformation, reduce manual processes, enhance customer and employee experiences. Thus it requires careful planning, expertise, collaboration and communication between stakeholders and appropriate execution. 

Author Bio:-

Deepali Daiya is a communication expert who excels in understanding customer needs. She writes powerful sales scripts and articles with very high conversion rates. Currently, she is associated with Sage Software Solutions, a leading distributor of high-quality ERP system and CRM systems to small and mid-sized businesses in India.
Twitter Profile:- https://twitter.com/2021Deepali