Postmodern ERP for Old-School Manufacturers: Are they primed and ready for change?
For centuries, many of the world’s production lines remained unchanged, relying on manual processes to manufacture a wide range of business and consumer products. Enter the industrial revolution and the age of machine-driven production processes. But despite turning manufacturing into an all-being, all-seeing, capable-of-anything industry powered by digital solutions, today, there are still traditional, aka, ‘old-school’ industries, namely manufacturers, that have not yet jumped on the bandwagon.
Old-school manufacturers, are those who are still using legacy systems to manage and control their business operations, or a veritable mix of off-the-shelf software tools and manual processes, are not only lagging behind, they are missing the boat. There are manufacturers, big and small, that retain outdated software, even when more efficient and exceedingly more secure upgrades are available.
How then, can manufacturers, whether they are producing ‘cheese or checkboards,’ be swayed into upgrading or replacing their existing standalone legacy systems with minimal disruption, and at a cost they can ‘live’ with? Deciding what to do next, is an arduous task. Manufacturers must maintain their business continuity, deliver quality products on time and on budget, and uphold their competitive edge, all while planning for the future – but without knowing what their future holds.
Enter postmodern ERP. In a word, it has become a lifesaver for the reams of old-school manufacturers out there that are primed and ready to move forward, and yet, don’t know how – or when. Let’s take a look at the merits of postmodern ERP, enterprise resources platforms that are fast replacing traditional ERP at its core, and how, with careful planning and execution, manufacturers can bid their legacy systems farewell, and power their operations with tried-and-true digital tools and processes.
What is Postmodern ERP?
ERP systems are not a new concept. In fact, they’ve been around for decades. They’ve advanced in size, scope, and functionality over the years, but ERP is fundamentally “still” doing its primary job – enabling organizations to effectively manage and control their operational processes, end to end. But traditional ERP didn’t stop there. It evolved – with no plans to stop any time soon.
Postmodern ERP, as deemed by leading IT market analyst firm, Gartner, describes a new approach to getting the most out of these complex business management systems. In short, postmodern ERP is a somewhat ‘piecemeal’ adoption of ERP modules that best suit your company’s needs. With that, your organization will have all the tools and functionality it needs to shape a single unified ERP system. It’s essentially a new-fangled strategy that automates and links administrative and operational business capabilities, such as finance, HR, purchasing, manufacturing and distribution, with the necessary levels of integration to power business flexibility and agility. It’s called “postmodern” because it essentially reshapes and rebrands ERP software from a giant-size single central program into two smaller, easier to digest of strategic ERP categories – administrative and operational.
Administrative ERP focuses on the admin side – financials, HR, and procurement. It’s intended for organizations that do not either produce or distribute goods or services, those without a production line, referred to as service-centric.
Operational ERP is designed for specific verticals, such as manufacturing, distribution, and retail. Called product-centric, their ERP goes beyond basic administrative functions into operational areas, such as order management, manufacturing and supply chain, to maximize overall process productivity and efficiency.
Postmodern ERP is a relatively new idea. While enterprises are more capable of meeting postmodern ERP head on, small and mid-size companies find the concept tough to grasp, let alone, to consider replacing their legacy systems with the proverbial ‘new kid on the block.’ Some will take the bait, lay their outdated software systems to rest, and replace them with ERP, while others will end up doing what most businesses do – ignore their old systems, and continue to, albeit, painfully carry on.
Why Take the Postmodern Approach?
It’s more flexible. One of the main reasons why organizations are drawn to postmodern ERP, is that it’s exceedingly more flexible, and more scalable than comparable business management software or legacy standalone systems. This means you can quickly and easily integrate new modules, new processes, and complementary software products into the system. Plus, a cloud-based or hybrid (mix of cloud and on-premise) ERP, will offer you an extensive selection of modules and functionality to choose from, and onboard new modules as and when you need them.
It’s (all) yours for the asking. With postmodern ERP, not only can you select what you want and need in your system, you also have the opportunity to scan the market, and choose the ERP vendor that best meets your needs – all on a single platform – and all in one purchase from one vendor. Today, reams of legacy ERP software vendors are snatching up smaller niche software providers, and integrating their features and functionality into their core systems. While this may be a viable option for some, it’s not for everyone, as you don’t want to rely on your vendor to choose the modules ‘they think’ will work best for you. Postmodern ERP also offers vertical-specific systems, tailored to meet your industry’s unique needs.
It can potentially cost you less. Postmodern ERP will give you precisely what you paid for, with no surprises, and without extra modules or add-ons that you don’t need, at least for now. Essentially, this will lower the cost of your initial investment, especially when compared to upgrade and IT manpower costs incurred with maintaining your legacy systems. Postmodern systems are generally offered at a lower price than a traditional ERP, where you may have to reply on the services of multiple vendors. The postmodern ERP approach will save you costs, valuable resources, and time across the board, so that you can turn your attention to managing and growing your business.
“But it’s just a facelift” – Why replace your legacy systems?
Replacing legacy software means updating and optimizing your current systems to boost your business, become more operationally efficient, run smoother, more seamless processes, and automate, automate, automate. The key drivers that push businesses (before they’re pushed over the edge!) to replace their outdated software are cost – whereby legacy system infrastructure costs more to maintain over time; security – or the lack thereof, compliance – keeping pace with dynamic government, tax and banking requirements; competition – if you can’t keep up, you’re out, and productivity, where you can no longer give your employees the tools they need to work more efficiently.
Modern software, aka, postmodern ERP, enables organizations to forge ahead, with extra-added functionality, including mobile applications, powerful analytics, cloud-based tools, such as AI and IoT, and scores of others. In turn, you’ll be able to achieve operational efficiency, not only with your software system, but with hardware and equipment. You’ll be able to handle technology constraints, meet customer demands faster and smarter, and be able to onboard and integrate complementary software products into your new platform, to further support the user and the customer experience. In other words, replacing your legacy software is good for you – and your business!
If and when your legacy software becomes too tough to handle, or when it keeps you from effectively running your business, or it keeps you awake at night – or when it’s just too costly or worse, too risky to your business, before you jump, think. Ask and answer these questions – first:
- How do my current systems serve my business?
- Do these systems give me timely responses – the information I need, when I need it most?
- Do the running costs and maintenance time (and costs!) make it worth keeping?
- Can my IT teams handle the load or do I need outsourced IT support?
- Do my current systems meet my employees’ needs?
- What about my customers’ needs? Do my current systems enhance the customer experience?
Holding on to legacy systems is not good business, and it does not promote good business health. With tremendous financial costs, compromised system and data security, risk of commercial losses, and operational challenges that will hinder or put a full stop to your production processes, it’s time to rethink and reassess how you do business.
While replacing or upgrading legacy systems can be a costly commitment, in the end, it will outweigh the costs of supporting your outdated, unproductive software. Investment aside, despite it being a key catalyst for traditional manufacturers, moving on and ‘moving up’ to an advanced system, the likes of postmodern ERP, will not only boost your bottom line over time, it will help you hold on to your customers, be more attractive to new prospects, and give your employees a smarter, better, and more intuitive system to enhance their skills, and even enjoy using.