How do you know when it’s the end of the road for your ERP?
This is a good (and recurrent) question routinely encountered in our line of work. The answer differs depending on multiple factors, not the least of which include the age of your ERP system, any business changes such as moving in new directions or expanding beyond the capabilities of your existing software, the emergence of new or better systems capable of meeting your requirements more accurately, and any one of perhaps dozens more reasons. Sometimes, knowing you’re at the end of the road takes some or all of those factors along with a good old dose of gut feel: you just know when things aren’t going that well. And when the realisation hits, it’s worth looking not only at the limitations posed by the old system but also at the advantages possible with a new one.
Now, the good old Kiwi way is that if it ain’t broke, don’t fix it. There’s nothing wrong with that, either. Some truly ‘old’ (in years) systems are perfectly fit for purpose, while some ‘newer’ (in years) ones can quickly hit obsolescence. The key here is ‘fit for purpose’; if your ERP does little more than run the GL and other financials, justification for replacement is thin. If, however, you’re running a lean manufacturing operation with a vertically integrated supply chain structured around just-in-time logistics where real-time information is the difference between profit and loss…well, in this case, appropriately capable software becomes a competitive necessity.
The canaries in the coal mine
All that said, and with your gut feel as the backdrop, there are several telltale signs worth looking out for. Our top markers, if you could call them that, include the example just given above. If your fast-paced business depends on accurate, real-time data and your system isn’t delivering, well Houston we could have a problem.
The logicians will tell you that drawing a conclusion from something absent is a fallacy, but you’ll have a good sense of data problems when you see them. Often, spreadsheets and other workarounds alert you; waiting for reports, reworking things when inaccurate information eventually shows up and stressed people uncertain of quantities or orders or anything else, are further evidence of information deficiency.
This is closely related to another challenge we see. Workaround systems become complex; you might develop ‘key man dependency’; taking on new staff is a challenge as they must first learn arcane processes and systems before getting to work. It might be the overall cobbled-together-from-multiple-disparate-and poorly-integrated-systems picture which is too complex…or it could be that one ancient greenscreen system made before Xerox invented the GUI. Either way, excessive and unnecessary complexity screams ‘replace me’ louder than your people (probably) do in frustration.
And if your people are spending half their days on essential but truly mundane manual processes (described rather nicely as ‘swivel chair integration’), then surely there is a better use for their time.
Finally, the last big, yellow canary is when your ERP system is out of support, hasn’t been updated in years, and in some cases, the vendor no longer exists. Yes, these things happen!
From stick to carrot
The shortcomings of an obsolete ERP system are a bit of a stick with which vendors like encouraging customers into an upgrade (to be fair, let he who is without sin, etc.) Be that as it may, but there are plenty of very good reasons for leaving behind that which belongs in the past.
Most of the very good reasons aren’t about those shortcomings, but instead about the advantages associated with a new system. Sure, it will be shiny and bright (compared with the greenscreen, this is quite literal). It will also do much, much more.
The biggest innovation in ERP in recent memory is almost certainly its move into the cloud and becoming an on-demand utility. Not only does that mean ditching the creaky old hardware running that greenscreen application, but in today’s environment of uncertainty it also means unparalleled flexibility from at least two essential perspectives.
That’s top of the pops for us today. A lot has happened to get us all to where we are, but economically speaking, there will be ups and downs. Flexibility is in the system itself, with cloud ERP delivering adaptation with minimal overhead; focus on business, not expensive, creaky, monolithic software and hardware.
Then there’s flexibility for equipping people with the tools and access for work, wherever they are. These days, remote working is the standard (if you aren’t working remotely, are you even remotely working?).
Having mentioned people doing mundane things, a modern cloud ERP takes a lot of that away and automates it. Think regulatory and accounting compliance: fun when the system does it. Not fun for anyone when the grumpy accountant gets amongst.
Compliance is only one aspect of reporting, of course. There’s also the information required for everyone doing their job; with a unified and accurate view from exco right down to the factory floor, decisions are faster and better. There’s potential for performance gains, in other words, with rapid reaction times. Accurate data means knowing important metrics, too – like unit economics, customer and project profitability.
Let’s see what works for you
I started this blog noting the many factors which must be considered before determining the necessity for turfing out the old and introducing the new. Your specific requirements and aspirations require a closer examination which will determine what’s right for your business (perhaps consider NetSuite’s ‘7 Ways Cloud ERP Helps Businesses to Grow ’ whitepaper; it’s only a 7-minute read). On top of that, we’d love to hear from you – get in touch, and we’ll gladly take a look and advise what NetSuite cloud ERP can do for you.
