7 Warning Signs That Your ERP System Is Holding Your Business Back30 May 2013 | by Natalie
Unfortunately, all software solutions have a shelf-life and eventually it will be necessary to upgrade or enhance your current ERP system. Your existing program won’t be able to incorporate all of the new technological advancements, it will become slower and bogged down, and your competitors will start to gain a slight advantage. These are just some of the warning signs that an upgrade is inevitable.
Many companies choose to switch to pre-set CRM and ERP systems not configured to their needs. They will make compromises and find ways to adapt their procedures to suit the software instead of hiring an ERP expert that can configure the program to your business. A professional ERP update is a time-consuming and complex process; however, the end result is a faster and more efficient system that has been configured specifically for your organization. That means it is worth doing right the first time so you see a great ROI.
How could my ERP system hold my business back?
By using your own intuition and experience, you will be able to recognize performance issues and determine aspects of your ERP system that are not providing your company with all that they could. Slow starts, invalid functions, and outdated practices could all be preventing your business from reaching its real potential.
Another way an outdated ERP system could hold your business back is if it cannot easily adapt to new technology like cloud computing. Start by comparing the capabilities of your current system with the extensive range of options that are available now. How many of the new tools and features would make your business run smoother? Not taking advantage of everything new technology has to offer is certainly holding your business back.
Recognizing that there is a problem with its current performance is the first step to resolving the issue. You won’t realize exactly how inefficient and ineffective your previous system was until you have experienced the benefits of an ERP upgrade.
A new CRM and ERP system implementation will revive your business by enhancing processes, streamlining procedures, and improving overall functionality. It will also provide exciting new opportunities for growth and expansion.
Evaluating Your Business and Existing ERP Solutions
If you think you need a new CRM and ERP software solution, you are most likely right, but you can be certain that you do by answering a few simple questions:
Could your company’s processes be improved upon?
In some cases, a business’ current processes could be holding them back instead of the CRM and ERP software. A lack of employee training, inefficient processes, and organizational dysfunction cannot be solved by upgrading your system. Make sure your existing program is being used properly and tools are being used to their optimal potential before determining if it is time for a switch.
Do you need an upgrade or a whole new ERP system?
An upgrade will be simpler and less expensive to manage than a completely new ERP system. If your company has outgrown the current ERP software, the same vendor many offer incentives for choosing one of their higher-end product upgrades. There are not as many risks involved in a move from products that are within the same family, so there is less chance of delays and disruptions.
Switching your ERP system provider and software has many worthwhile benefits. Although more training and effort will be required initially, it could significantly improve your processes and make your company run more efficiently.
In the next section, we are going to discuss warning signs that your ERP system is holding you back. If you find many of these seven reasons apply to your business, you may want to consider overhauling you entire CRM and ERP system. Once you have concluded that an ERP upgrade or switch is necessary, there are three essential steps to successfully pulling it off.
- Plan, Plan, Plan – you need a clear migration path planned from conception to conclusion
- Customization – you will get better results with a solution created specifically for your business
- The ERP Vendor – you need an experienced professional to get the most from the software
All it takes is careful planning, a configurable software solution and an experienced, reputable ERP vendor. If those three aspects are covered, the actual implementation process should be smooth and rewarding.
These are 7 Warning Signs Your ERP System is Holding Your Business Back
1. Your ERP system hasn’t received a significant upgrade in more than three years
Ordinarily a business could maintain the same ERP system for considerably longer, but technology has launched some impressive new features and services in the last few years. The modern business world is now conducted online and mobility is becoming an essential component of industry leadership. Big companies are using their new global reach to expand and businesses stuck in the past will stay there.
2. People are adjusting your business processes to suit the ERP system
If the current CRM and ERP program forces workers to use inefficient processes to coincide with the software’s capabilities, then it is costing time instead of saving it. Your ERP system should be an adaptation of your company’s best practices. If the ERP software is not flexible enough to accept new procedures and more efficient processes, it is holding you back.
Your competitors will be taking advantage of better solutions and more advanced technology while your employees are fiddling with obsolete processes to manipulate them into the achieving the optimal result. This is a clear sign that it is time for a switch, or at least an upgrade.
3. It is no longer a cost-effective solution
When you initially planned your ERP solution, you would have most likely calculated the costs to make sure the price fit the services it offered. Your business is dynamic and constantly evolving. As things change, these original calculations may no longer be relevant. Modern cloud-based (which I will discuss later) ERP solutions can cost significantly less than legacy systems. ERP is a highly competitive business and it is important to investigate your options. However, I don’t recommend choosing solely on price. This is a major upgrade and worth the investment.
4. It doesn’t offer cloud computing capabilities
I mentioned cloud computing in the last section, because there are clear signs that every business will eventually move to a cloud-based system. Cloud has already changed the way countless Fortune 500 companies manage their business and companies of all sizes are realizing its exceptional benefits.
Traditional, legacy ERP solutions require you to purchase a license and load software onto your servers in order to utilize the system. In a cloud-based ERP system, all you need is an internet connection. The ERP runs from the data center of the service provider which significantly reduces operating costs. You will not need to purchase an abundance of licenses and you will not need to invest in high-performance hardware.
5. Users are Opting to Work outside of the ERP system.
There are some things your employees will want to perform in the system that it cannot accommodate. For example, if a company adds a new product line or process, the legacy system may not be able to incorporate the information into its current programming. In those instances, they will choose to go outside the ERP system and use other programs, databases, or spreadsheets to create the desired result.
Opting to work outside the ERP system generates isolated bits of information that are not included in ERP reporting. This could lead to serious inaccuracies and inconsistencies that could be holding your business back and causing countless future problems and expenses. There is no value in having a CRM and ERP system if it is not being used by everyone on the team for all relevant information. This is the only way to ensure it is an accurate reflection of your operations.
6. It was Not Configured for Your Company
Quite often, a company’s first ERP solution will be a store-bought version that doesn’t quite meet all of your company’s goals and objectives. If it hasn’t been configured specifically to suit all the functions and procedures of your unique business, then there is no question that it is holding you back.
7. No longer Have the Right Staffing or Vendor Support
When your existing system was first implemented, you had plenty of IT and vendor support from people who understand exactly how it was developed. As years went by, the program itself would have been manipulated by various IT staff and it is a shell of its original specifications. There is no one left who completely understands the system and how to get the optimal use from it.
This last warning sign should inspire you to also have back up personal and third-party support for your ERP software. Employee turnover is a major threat to your current system that should be taken seriously. An upgrade or switch will be accompanied with fresh support to ensure that your program is being managed by professionals that fully understand the system.
There are many different reasons why you may want to change your ERP software, but the main reason is that it is holding you back from your business’ full potential. If there are greater capabilities available, your business is missing out on potentially-profitable opportunities by not actively pursuing the best technology.
These are the 7 warning signs that your ERP system is holding your business back. There are other smaller signs that will nudge you in the same direction. Organizations that feel their ERP system is not giving them everything they need to achieve the results they want should make a switch or upgrade as soon as possible to maximize their full potential.