We see it every day with our current and prospective clients: company installs ERP system, it costs more time and money — and causes more pain — than it should have, and after years of usage, the business and software become misaligned. When this happens, the CIO or COO will inevitably call us insisting that the software is broken and that it’s time for a new solution, leading to an evaluation and selection of new ERP software.
It may sound crazy, but one of the first questions we usually ask is, “Do you really need a new system?” After all, it can take some time and effort to select new software, and implementations are costly and risky. Many cases do involve a legacy system that’s just not a good fit for the business and never will be, but if it makes sense, a rejuvenation of the existing solution can be less risky, less costly, and less disruptive to an organization. After some digging and analysis, we often find that companies are leaving a great deal of low-hanging fruit on the table that can easily be addressed by simply conducting refresher training, tweaking businesses processes, making updates to the software configuration, or in some cases, upgrading to a new version of the software.
Before heading off the deep end and assuming you need a new ERP system, it is helpful to ask a few key questions to start:
- Is your ERP system really the problem? Although we have plenty of clients that are in dire straights with their current legacy enterprise software, I would estimate that the software itself more often than not the real problem when a company first contacts us for a software evaluation. Even if it was implemented well, which most of the time it isn’t, ERP software tends to get misaligned with evolving business needs over the years. Instead, look at how well your business processes are functioning, how competent your employees are with the business processes and systems, and the cost-benefit of doing some reconfiguration or upgrades to the software.
- Are you running the latest version of the software? The evolution of ERP at most organizations is pretty common: the slow misalignments mentioned above build up until the company finally stops upgrading the software, which further exasperates the problem. We see clients that haven’t upgraded in several years, only to wonder why the software is dated and unable to meet their key business requirements. Although upgrades are never really simple, they can be a lot simpler than a full rip and replace of the system.
- What is the best way to align your business with your ERP software, and vice versa? The final question is to ask what else could be done to align business and software. What are the different available options and what is the estimated return on investment for each scenario? We often help clients look at the costs vs. benefits of several scenarios, such as process improvements or implementations of advanced modules of the current system, before making a final recommendation. Even if you are leaving some potential benefits on the table by sticking to your current system, the potential lower costs and risks combined with the overall return on investment may justify that approach.
So perhaps it’s not your system that’s the problem — maybe it’s simply time to rejuvenate your ERP software. Learn more about your options by attending our free webinar on August 4, Tips for Selecting the Right ERP Software for Your Organization.