Blog Written By | ERPFocus
6 Warning Signs that ERP Change Is Needed
Your ERP system is the scaffold of your business. It connects and supports all aspects of company activity and culture, so any ERP change should be well informed and researched. This research should be done on a case-by-case basis, during which you should look out for these key warning signs.
Major Business Changes
Any large-scale changes to a business will affect the suitability of your legacy ERP system to business needs. In many cases, legacy systems just aren’t appropriate following a major business change. During mergers and acquisitions, the collision of different company cultures and activities make a necessity of ERP change. Equally, changes in market and location can be difficult to integrate into an ERP system that was implemented on past requirements and specifications. For a legacy ERP system to survive these changes, it must be adaptable.
Poor User Experience
Your workforce’s experience with your ERP system is crucial to its success. They are the day-to-day users, and if they are not happy with legacy systems, it will impact on their work and your company’s profitability. In order to gain support from the workforce, ERP change must strike a delicate balance between an intuitive product and an innovative product. It must begin to incorporate important user trends such as mobile and bring your own device (BYOD) support while maintaining ease of use and low training costs.
Lack of Compliance
Nothing may drive ERP change – and business change – more than issues of compliance. Meeting regulatory requirements consistently and efficiently is not just a matter of company culture, it is often a matter of law. The compliance of an ERP system is directly affected by its age.
Vendor Growth Hacking
Perhaps a non-traditional warning sign for ERP change, growth hacking can be a dangerous business when it comes to ERP. Growth hacking involves the change in company products or activity based upon current market trends. This is a great thing if executed well. If executed poorly it can lead to poor products and lawsuits. Growth hacking in the ERP market can take the form of acquisitions from ERP vendors and new product functionality. Both should be treated with caution. How well integrated with my legacy system is the new product/functionality going to be? Is it going to cost me more? Do I need it? All these questions should be asked. The answers may provoke ERP change.
No list of business variables would be complete without the cost. If your legacy ERP is beginning to seem like an endless sinkhole for company cash, ERP change may begin to look like a cost-saving exercise rather than an outlay. Whether direct (upgrades, support) or indirect (the need for manual processes), legacy ERP costs have the potential to dramatically affect your ROI and profitability.
Low Vendor Activity
When your ERP vendor activity drops, alarm bells should ring. A ‘vendor silence’ – characterized by a lack of product updates and correspondence – can be a warning sign that ERP change is needed. Unless you have the support and regular updates from your ERP vendor, your legacy ERP will become outdated, leading to issues with compliance and user-experience.