Whilst enterprise resource planning (ERP) software is the backbone for streamlining business processes, it’s important to remember that, like most technology, it has a limited life span. As technology evolves, so will your company; resulting in the need to replace your current ERP system.
Related: What is an ERP system and how does it work?
Many businesses tend to delay the upgrade of their ERP software as it can be a serious undertaking. However, this will merely result in your business relying on a system that’s eating into your time and resources when you could have a significantly more efficient system in place. With this in mind, here are six signs that it’s time to change your ERP software to ensure it remains/becomes a profitable investment.
Unsupported software
One of the biggest red flags that your ERP system needs changing is when it’s no longer supported by the manufacturer. Whilst it might be functioning well enough so your employees are still able to work, the system will eventually become outdated. Imagine if one day your ERP system suddenly stopped working or had an error message. Without the manufacturer, no one would be able to help you fix the problem leaving you without a working system. The inevitable chaos from this scenario could result in serious consequences for your business’ productivity: it would be more efficient to replace the software sooner rather than later to eliminate any risk.
Employees complain about the system
If your ERP software is causing employees to complain that it’s difficult to use or that it’s preventing them from completing their tasks, this is a major sign that your system needs updating or replacing. Usability is key, so failing to update an outdated system could cause your employees to start working outside the software, diminishing both its value and effectiveness. This could also result in data inputting becoming prone to human error, making monitoring and reporting extremely difficult. Once the new ERP system is implemented, provide your employees with additional and ongoing training to facilitate them becoming more familiar with it in a shorter timeframe otherwise productivity could be noticeably reduced.
Cloud compatibility
Whether or not your company is interested in cloud compatibility at the moment, it is revolutionising the way several businesses operate, in fact – the number of businesses operating on cloud-based ERP systems grew from 11 per cent in 2015 to 27 per cent last year so it might be worth considering upgrading to a cloud-compatible ERP software. Systems such as Pegasus software enable you to access a complete business solution online, whether it’s at the office, via a mobile device or at home; putting the user experience first. Cloud-compatible systems can be easily integrated into your business’ existing processes, providing you with everything in one tailored solution. If your current ERP software is not ‘cloud-compatible’ then you should start looking into other options to increase your mobility.
Outdated licensing
The cost of updating your ERP system is one of the most critical parts of the decision to either stick with your current system or to replace it. With the ever-evolving development of technology, cost models for ERP have also changed. Unlike many of the older ERP solutions, the modern options enable you to keep costs to a minimum and adapt to the changing environment. Whilst the licensing is only a small part of the overall cost, it is important to regularly check the cost of your current ERP system compared with replacing it for a newer one.
Systems don’t communicate
If your business relies on multiple software packages that aren’t communicating effectively with each other, it is time to consider scrapping them all and looking into an integrated system. Forcing your employees to spend their time transferring data from one system into another will simply waste their time and reduce efficiency. Modern ERP software incorporates accounting, invoicing and financial analysis alongside the functionality of customer relationship management (CRM) with marketing, sales, warehousing, purchasing and manufacturing; rendering manually importing data between systems obsolete.
Strong reliance on key people
Older ERP systems, especially those that have been developed in-house or are heavily customised, are usually reliant on just one or two people in the business to keep them running smoothly. These people know the system inside out, but what if they both decided to leave? This could pose a large threat to the everyday functionality of your business. To combat this, select a new ERP system that is easier to manage by all employees to guarantee there will always be someone who can support the system.
Although deciding when to change your ERP software is never easy, it is essential you regularly review your processes to determine if you’re using an outdated system. Evaluate how your business’ requirements have changed over the years against how the system is currently performing. With new technology and developments, replacing your ERP system can be a catalyst for a wide range of positive changes throughout your business and, with the right training, all your employees can be experts on a new ERP system. Just make sure you don’t leave it too late!
Further reading on ERP software
