ERP, Enterprise Resource Planning, is a business management software solution that first appeared on the scene back in the 90s. Yes, it’s old, but it’s never been more relevant, nor more sought after, than it is today. ERP helps companies to collect, interpret, manage, control, and share their data to power their operations, from the front door to the factory floor, and beyond.
As the technology evolved, and the ERP space grew in popularity, size, and scope, standalone legacy systems, struggled to keep up. Typically, because of its complex system architecture, a myriad of modules and functionality, upgrades to the traditional, on-premise ERP systems are tough to enforce, let alone, maintain. This often leaves customers in limbo, unable to enjoy the benefits of, for example, enhanced data analytics, a more intuitive, customizable user interface, or the tremendous added value of mobile ERP. Add to this, the cost of system upgrades, an important factor when calculating ROI.
This is why numerous organizations are looking to ‘trade in’ or essentially, ‘trade up’ their on-premise ERP for a cloud-based ERP system. The number one reason for a shift is that cloud ERP offers accelerated and accurate data storage, and costs less to maintain than the on-premise system.
Before you consider replacing or upgrading your current ERP, you should know that the stakes are high, where implementation costs can spiral out of control, depending on the size of your organization and the number of users. What’s more, project implementation is complex, time-consuming, and resource intense, and can take anywhere from 6-18 months to complete.
Nevertheless, if you want to stay in the game, and remain competitive, upgrading or replacing your ERP is essential – and here’s how to do it, right.
5 Tips to Consider before Replacing your ERP
- Stamp of approval. Prior to replacing your ERP system, the first order of business is to ensure that all decision-makers in your organization – your management and your board, are ‘on board’ with this decision. Every company plans ahead, laying a foundation for the future, where the first question to be asked (and answered) is, “How essential will this change be to our business?” and, “Will it meet our internal operational needs and external customer needs?” And finally, “How will our organization benefit in the short- and long-term, from implementing digital technologies?”
- Build a game plan. Companies must ply their accumulated expertise, skills, and know-how, often with the help of an outsourced ERP consultant, to develop a long-term plan, ideally for the next 10-15 years, before implementing a new ERP system. This plan should be based on your unique business requirements and goals. In parallel, it’s recommended that you/your company scans the market for viable contenders, recognized and reliable ERP software vendors, who share similar ideals, and have a clear understanding of your company’s real needs.
- Rethink and redesign. The most successful organizations do a lot of groundwork before replacing their ERP. By redesigning their current system, no matter how old or how outdated it may appear to be, companies can create sufficient space (in the virtual sense) to onboard a new system, and everything that comes with it. The process includes mastering the art of data migration from one system to another, a process that generally takes more time than anticipated, but is considering the heart of the onboarding process.
- Dollars and sense. Critical to any successful ERP implementation, the main focus should remain on using your budget wisely, and not diverting from the initial plan. Devote your time and resources to the project, and recruit the best possible internal team, CIO, CFO, IT, system admins, and others, to help bring the project to fruition. Even if this means bringing an external ERP consultant on board, add it to your budget. It will be money well spent.
- It’s about time. After implementing the new system, it’s important for organizations to give themselves ample time to get acquainted with the new software. Initial adjustments, to be expected, can include decreased performance, downtime, glitches in data/document sharing, transactions, and other seemingly basic tasks. Mastering just about anything new, takes times, patience, and vigilance. The same goes for ERP implementation. From the get-go, until the go-live, there will be bumps in the road, but over time, coupled with accumulated experience (and a positive attitude), the system will become exceedingly easier to master.
When is a Good Time to Replace your ERP?
If you are in the proverbial ‘gray’ zone and still can’t decide what’s best for your business, we’ve amassed a list of pros and cons, detailing why you should replace your current ERP, or alternatively, hold on to it, and opt for a system upgrade.
Consider replacing your ERP if:
- You have multiple upgrades to your current system just to keep afloat, and ones that might cost you the same as implementing a new system
- You are on the same page with your parent/owning company regarding a replacement system
- You are disappointed with your current ERP vendor, customer support and service, response time, general admin, or programming
- The current system architecture no longer supports your vast amounts of data, integration with third-party software, or mobile applications
Consider upgrading your ERP if:
- Upgrading to the latest version will help meet and exceed your current and future business needs
- The overall cost of ownership is significantly lower
- You have a satisfactory (or better) relationship with your software provider, where your vendor is committed to your continued success, and smooth system deployment
- Your end-customers are satisfied with your current system, and making a drastic change, could result in decreased user adoption by other stakeholders in your supply chain
The Bottom Line
Onboarding a new ERP system is a major milestone for any organization, but when all is said and done, and done right, it can result in increased operational efficiency, productivity, and profit. Successful ERP implementation, be it a replacement system or an upgrade of your legacy software, requires unconditional executive support and employee involvement, clearly defined project scope, a detailed (and doable) plan to optimize your business processes, proactive change management, and a copious amount of patience. Good luck!
If you’d like to learn more about ERP implementation, the how, why, and when, contact us today to schedule a call with one of our ERP experts.