Another New Year is progressing and you may be feeling it’s time for new ERP software. Your old system is broken, employees don’t like it and your business processes inefficient. You feel like you need to do something right away to fix the problem. Before lunging forward with a new ERP evaluation and selection process, it may help to take a step back and consider if the problem might be something other than your current system?
Could it be you haven’t upgraded the system in a while? Maybe you have over-customized the software, which has made things worse? Or perhaps your business processes and organizational dynamics alone could be improved to help alleviate some of the pain?
Whatever the symptoms, your broken ERP software could be a root cause pointing to other issues. Perhaps fixes to your current environment could yield a stronger return on investment at a lower cost/risk than a full rip and replace. This isn’t always the case, but it’s true more often than you might think.
Being completely technology-agnostic, our team doesn’t care whether a client replaces their current system. We don’t sell software or have financial ties to ERP vendors, so we objectively analyze each clients’ situation, to help determine the best path forward.
Even if you do ultimately decide to replace your system, there are ways to get more bang for your buck in the short-term. Here are five tips to get more value out of your current ERP system:
1. Identify the root causes of your current business process and technology environment
Flawed ERP systems are usually the results of people or processes – not the technology itself. Most ERP software “works,” but it often doesn’t work for your business. For example, a business process may not have been well defined, which makes the system more difficult to use. Whatever the reason, it’s important to analyze the causes of misalignment between the technology and your operational expectations.
2. Assess and identify improvements to your current business processes
Broken or redundant business processes are often the culprit of broken business systems. If this is the case, then even the best enterprise technology won’t help fix the problem. Rather, it will simply mask the root cause. Even in cases where a new system is being implemented, we typically advise clients to identify potential business processes that can be improved in advance of the new technology. This also helps pace the rate of change employees need to adapt to, while possibly accelerating potential business benefits.
3. Evaluate potential organizational change management issues
Employee resistance to change – either intentional or not – is another common root cause for flawed ERP systems. As is the case with business processes, a new ERP system is not going to fix this issue. Employee resistance may be difficult to identify and address, but it’s a must-do if you are going to improve your operational efficiencies and effectiveness. And here’s a low-cost, actionable recommendation: conduct an organizational assessment to determine where the organizational issues are and to help develop an organizational change management plan to address them.
4. Objectively assess various alternatives and scenarios
Once you have considered the potential root causes of your challenges, it is important to consider all your options. For example, you might evaluate one scenario involving the potential implementation of a new Tier I ERP system, such as SAP S4/HANA or Oracle Cloud, while another option might entail more simple improvements to your current environment. You will want to evaluate costs, benefits, time commitments, resource requirements and risks associated with both options. An objective evaluation of your various alternatives will ensure you are making an informed decision, coupled with a solid strategic plan to move forward.
5. Enlist the help of a technology-agnostic and independent ERP consultant
The above four steps may sound good, but they are difficult to execute without the right competency and objectivity. This is where the help of an independent ERP consultant (such as Panorama Consulting) can help provide an objective view of your challenges, potential scenarios and recommended action plans moving forward. Make sure your consultant is both very knowledgeable in ERP software and is, in no way, incentivized to recommend new technology unless it makes sense for your business.