We often work with clients who are determined to replace their legacy ERP systems. More often than not, by the time a company engages Panorama to evaluate and select a new system, key players in the organization are determined to find something better than what they have now. The software doesn’t work, employees are frustrated, and executives don’t have visibility into business operations.
Sounds like a no brainer, so why would an organization want to consider keeping their current system? There is one key reason: application erosion. Even after 15 years in the ERP consulting industry, I am still amazed by how many companies have trouble with their business processes or suffer from organizational change management issues, but blame the software instead. It is not at all uncommon for us to find that their core issues can be addressed simply by upgrading the software to a more recent version, better aligning business processes with software functionality, or addressing common organizational change management issues.
Here are a few things to consider when determining whether or not you are suffering from ERP systems erosion:
- Are your operating on an old version of the software or have you migrated off of maintenance? If so, there is a fairly high probability that a less risky and less costly upgrade to a newer version of the software will deliver a more positive return on investment than a full rip and replace of the system. In addition, your incumbent ERP vendor will often more aggressively price their software in an attempt to protect their maintenance revenue stream and keep you from opening up the field to competition.
- How much is the software really to blame? I can confidently say that ERP systems get more than their unfair share of blame for business and operational issues. More often than not, business processes or broken, people aren’t properly trained, or the software was poorly implemented, yet the ERP software gets a bad name internally nevertheless.
- Has your software kept up with your business? Most organizations evolve fairly rapidly, so there are going to be inevitable disconnects between evolving business processes and the software the way it was implemented. In addition, most modern ERP software is very flexible, yet end-users often assume that the software will only work the way it was originally configured and implemented. For these reasons, it is important to explore ways that your existing software can be reconfigured to meet the changing needs of your business.
At the end of the day, it is a safe bet to assume that a more incremental upgrade or adjustment to your current system is going to involve less cost and risk than a full replacement. Obviously, you don’t want to pursue this path if the software really is a bad fit, but it’s important to make certain you have explored all of your viable options as part of an effective ERP evaluation and selection process.
Learn more about ERP best practices by attending one of our upcoming ERP webinars.