Some signs it may be time to consider replacing your ERP solution

By Gerry Savage, Principal Consultant, Lumenia. 

Many organisations are busy doing what they do – servicing their market by providing products and or services in their specialist areas of knowledge or expertise. 

This is often happening in an increasingly challenging world – with ever increasing demands from customers, maybe business expansion, either as a result of new products, acquisitions or entering new markets. Given these daily challenges, it can be difficult to step back to look at how your current ERP system is supporting the business. Read on – you may recognise one, or more, of the following signs…

Your Existing system is approaching end of life  

Software vendors are constantly working on developing “the next big thing” – the rate of change is staggering. As a result, there comes a time when vendors no longer invest in older products in order to concentrate on new products and technologies.  

When a software company makes a strategic decision to end support for older products there is frequently no straightforward upgrade path to their newer products.  While they usually give adequate notice, it would make sense to anticipate when this is happening and manage a controlled transition to a new system in advance rather than wait until you can smell the smoke from the “burning platform”.

Current system lacks critical functionality

While your current system was more than adequate when first implemented, your business has grown and is now dealing with more or bigger customers – possibly expanded into new territories. Clearly, expansion and success are to be welcomed, but they do place additional demands on your system.  

Customers require much closer integration in their supply chain supported by more sophisticated functionality including available stock visibility, faster more efficient deliveries and all using EDI based transactions.

Maybe you have expanded into new territories which demand more complex compliance with local tax regulations.

Further demands arise from ever more demanding needs in regulated industries – e.g. Food / Pharma and others.

These are but some examples of areas less sophisticated systems may struggle to support.

Highly customised solution – with limited support

Where basic ERP solutions were implemented in the past, it was common to customise these to fill gaps in functionality to either provide niche capability or to integrate a variety of point solutions. While this was a common approach in the past, it is, for the most part, no longer necessary given the evolution in capability of the leading ERP solutions. The growth of best of breed and add-on solutions which can now be readily integrated with ERP means the need for significant customisation rarely necessary.

Additionally, some vendor solutions are delivered with significant add-on elements often provided by other partners. While these deliver benefits, there are risks associated with this approach that need considering.

Another consideration related to customisation, given this is usually “one off” developed for your business, either by internal or external resource – as time goes by, it is likely to become less supportable, and thereby an increasing business risk which are ignored at your peril, in particular for mission critical features.

Inability to find answers to critical business questions

It is a not uncommon situation to hear managers complain they are unable to get even basic reliable and timely answers to simple questions. Simple things like reliable and accurate stock levels or production status information. Or field sales users unable to commit to deliveries when on customer sites, or other similar issues. 

Even more significant is the fact that the information your users need for decision-making, to react to problems and to do their jobs, remains hidden in the depths of your system. Users know what they need but the system does not present this information in a way that draws the attention of those who need to know.

While older systems had limited reporting capabilities and business could possibly live with the inherent shortcomings of these, current ERP solutions have much more advance Business Intelligence capability which presents data in a much more usable form, and proactively alerts user to situations relevant to their role.  In addition, the advanced drilldown capabilities also allow them to inquire and find underlying causes much more quickly.

Significant functions performed outside the ERP system

Quite often, when users in organisations find the system does not support some important function or activity, they quickly do what is required i.e. they become creative and make their own stopgap solution. This leads to a prevalence of standalone databases or spreadsheets. These can be used either to track and manage specific issues e.g. customer complaints, fixed assets and other similar situations.

Further, data from these informal solutions can be used as input to key critical systems, sometimes more than one, with the inherent inefficiency and opportunity for errors.

A new ERP solution could eliminate the need for these informal systems.

Summary:

As is clear, there are many reasons that would give cause to consider whether it is time to review the suitability of your current ERP solution. Any one of the above may, on its own, give cause to consider a review of your current ERP solution. Over time, it is possible that a combination of some of these, and others not listed, may require that you review your current solution.

It is clearly better to start investigating options for an appropriate new solution in a timely and controlled manner rather than under pressure – either that imposed externally or due to internal demands.

If you are in the market for a new ERP or currently thinking about replacing your ERP solution, attend the next Lumenia ERP HEADtoHEAD event taking place on March 24/25 Milton Keynes, UK and see 12 leading ERP systems in action.  

This event offers a unique opportunity to meet, compare and experience ERP vendors and their products. Find out more by visiting the ERP HEADtoHEAD website or send an email to info@erpheadtohead.com

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