Upgrading or replacing your ERP system is a big business decision. It can affect your financials, personnel, and operations. It can be a massive upheaval within the business so when is the right time to upgrade or replace your ERP system?
Experiencing growth is one of the main reasons for upgrading or replacing an ERP system. Will the system you have in place be able to handle the growth that you are expecting? Some growth indicators to look out for include:
- An increase in business transactions – this leads to more data and more pressure on your system to track it effectively
- Branching into new products or services – you might need a ERP system that is more multifaceted
- Branching into new markets – this can lead to new business requirements, tax changes, languages, and the need to access the system globally
- Adding new ventures – are you adding new divisions, is your business evolving? Your ERP system needs to be able to handle all the different aspects of your bigger business
When a new leader comes in, they could have a vision for the business that requires a more robust ERP system to support the business operations. Additionally, they could have a past system that they preferred or feel that a new system will help the business run more efficiently.
Mergers and acquisitions kickstart a lot of changes within a business, you have more employees, different revenue streams, and potentially involves your businesses moving onto a system that is already in place. Or it could be easier to move all systems onto a totally new system that allows for a blank slate.
Legacy systems that have been in place a long time can have customizations that you are scared to lose and there could be the thought that a known evil is better than an unknown evil however, legacy systems can cause more problems than an upgrade could. Additionally moving to a SaaS model could save you more IT costs than you realise.
How to know if you have outgrown a legacy system:
- It requires a lot of work arounds to get what you need out of it and not many personnel know how to do these and the ones that do know are leaving the business or retiring
- The software that you are using is no longer supported by a vendor
- It does not meet the needs of your business anymore. Can you access it on mobile? #
- Finding information or adding information is taking more steps than is necessary and is very time consuming
- You are constantly running into issues when trying to use it
Changing your ERP system is a decision that should not be taken likely, and every company has different reasons for moving from one to another. Not all of these reasons (if any) have to apply to your business in order to change your ERP system or you could have even more reasons!