Your ERP system is at the heart of your business and nobody looks forward to a heart transplant. Yet, if the system is not supporting the needs of the business, limits your flexibility or inhibits customer service, a replacement is called for.
ERP system replacement is a major business decision, and a major commitment of time and resources, so there has to be good reason to even consider it.
So, how do you know when it’s the right time to change to a new ERP system?
- Your system does not support the needs of the business. It lacks functionality, is hard to use, and response time is too slow.)
- It inhibits your efforts to adapt to changing customer requirements or market demands
- Operating costs are too high
- There’s no path to where you want to take your business – collaboration, new technologies (Internet of Things), analytics, etc.
Consider changing to a new ERP system if any of the following is true:
- Your team relies on spreadsheets to get things done
- You are unable to meet or exceed competitors’ customer service benchmarks because of system limitations or inflexibility.
- Competitors routinely outperform on cost/price, quality, lead time, and/or service. Do they simply manage their business better?
- Your system is unable to support the growth and change required by your business. You need better visibility and control.
- Executives get little useful insight from the system. It lack of dashboards, self-service business intelligence, or they are difficult to use.
- You have difficulty complying with requirements from regulators, creditors or board members
Today’s ERP can be impressively comprehensive, but are designed to be flexible, scalable and adaptable as business needs change. The best of them include integrated Business Intelligence (BI) along with a full suite of applications designed for your specific industry. Also, they are familiar and easy to use. It is accessible anytime, anywhere, through any device with a browser.
A properly selected and implemented ERP system helps:
- Increase sales and improve customer service
- Improve cash management and reduce outstanding receivables
- Reduce purchasing and production costs; increase efficiency
- Improve inventory turnover
- Better utilize people, equipment and materials
If your existing system doesn’t deliver the information you need to effectively run your business:
1. gathering a team of your best people.
2. identify the problems you want to solve.
3. identify the benefits you want to receive.
4. determine your timeline
5. research information about solutions and providers.
Unfortunately, too many projects fail or fall short of their goals because the organization was not ready for the work required to implement a new system. Here are five steps to selecting and implementing an ERP System.
To ensure success when replacing your ERP System, be sure to:
Get agreement across all affected areas of the company on the project goals and benefits
Establish an accurate budget (see “The hidden costs of ERP”)
Complete a cost justification analysis (return on investment or ROI study; see “ERP project justification”)
Identify the executive sponsor and assemble the project team (see “Building an ERP project team for success”)
Once you’ve identified a “short list” of potential ERP system suppliers or implementation partners, they may be able to help you with some of the above including costs and benefits, and implementation requirements. A knowledgeable professional can tell you about companies similar to yours and what their experience has been.