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When is the right time to upgrade your ERP?

Has your business been considering upgrading or replacing your current ERP? Perhaps you are wondering if it really is worth the effort and disruption. To help put an end to what could be a lively and ongoing debate in your boardroom, consider the following information about when and why you need to decide to start this critical business project. And remember too, nothing ventured, nothing gained. 

Is your ERP solution doing what it is meant to do? 

The first question to ask is: are all parts of your business working seamlessly, efficiently and with minimal manual work and work-arounds? By analysing this key question, you will quickly find the answers as businesses often reach the critical turning point to upgrade or replace their systems when they are triggered by the need for: 

  • increased efficiency
  • improved enhancements and features to make the end-user experience better, and 
  • improved functionality provided by the new ERP software/platform 

The IT market is set for growth and enterprise software is changing all the time with newer systems offering so much more; integration with other software, features that were once non-essential that are often now standard, mobile functionality, enhanced analytics, ease of use and more. 

If you can’t give a resounding yes to this question, then it is most likely time to take that first step, which involves analysing your operations, determining your critical requirements and then starting your research on what are the latest ERP technologies on the market today, that can modernise and streamline the way you do business. 

Is your business growing or going through change? 

There are several critical events that signal when a business is ripe for upgrading their ERP systems. The most obvious is when an organisation is experiencing significant growth or change. That can mean taking on new strategic directions, such as entering new markets, selling new products, or perhaps offering a new business line. All these instances will require that the business is using the latest technology so that data can be tracked seamlessly, readily analysed and efficiently reported, easy to use, and with the desired business objectives being achieved. 

If your current system is already struggling, it is fairly apparent that any new business growth will see your technology continue to labour, ultimately putting at risk, the success of any new business plans. A scalable ERP platform will support profitable future growth (ie, you won’t need to increase headcount at the same rate as your revenue growth). 

Are you keeping up with your competitors? 

It goes without saying that your business is always at risk from your competitors. If your systems are not up-to-date and lacking in what are now standard features available in newer technology, you will be denied the associated competitive advantages. 

Do your research on what technology is specific to your industry. Find out what systems your competitors are likely using, then make the decision to stay ahead of the pack with the latest technology, to keep or advance your market positioning. 

Has your Vendor stopped supporting your current technology? 

Eventually, that much loved technology from your Vendor becomes so outdated that even the Vendor won’t commit to further updates. The enterprise software market is rapidly changing and sometimes when a vendor has sold their product there is a sunset clause and you are pushed to ‘upgrade’ to their flagship product, which may not be the best for you.   

These are signs you need to bite the bullet and take the necessary steps to evaluate your options and potentially upgrade your business systems. 

Are legacy systems expensive to maintain? 

Custom built, legacy technology has usually been in the business forever, developed by who knows who, years ago. Often, no-one knows how they work or how they interact with other programs. Executives sometimes feel that changing these systems could have a devastating effect on the business, fearing the disruption that new technology could cause and deciding to leave well enough alone. This is despite the cost associated with maintaining the existing systems.

Legacy platforms are expensive to preserve and costs will continue to grow over time. Often it is very difficult to find people who can program old code and developers of today are mostly averse to working on antiquated technology when so much more modern technology is available on the market.  

Decision makers should be asking the question: if legacy software breaks down under a heavy load, how might the business be affected and specifically, can they afford not to upgrade? 

Another reason why people put off modernising legacy systems is the adage, ‘if it ain’t broke, don’t fix it’. Decision makers can fall into the line of thinking that if software is doing its job, why spend the money and time to replace it. This thinking is further cemented when budgets are tight and there is a reluctance to fund new IT business projects, like replacing outdated business technology.  

Still, it is important to make these critical upgrades for several reasons. Modernisation of legacy systems is about more than just setting aside the budget to do so. Organisations must evaluate the business risks of maintaining platforms that can’t easily adjust to changes in today’s business environment in order to remain competitive. 

Conclusion

The decision to upgrade or replace your current ERP business technology can be a daunting and difficult decision to make. It requires many stakeholders within your business to commit time and effort and to step outside of how they currently operate. 

Granted, it will involve a level of disruption and change but that should not be where the focus should be, nor should it be feared. The focus should be on the benefits attainable. 

So, if your business is not operating as efficiently as it could be, if it is put at risk by the current systems you are using, then the decision should be as evident as those questions posed.

Being clear minded about where your business is headed and how you wish to operate, should be the impetus to upgrade and modernise. Or ignore at your peril. 

SMC is a 100% independent advisory and consulting company that specialises in enterprise software to enable your digital future.

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