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By Sean Barbera • September 27, 2019

Four (Good) Reasons for Replacing Your ERP System

If it isn’t broken, don’t fix it.

That sounds good, especially when there are plenty of fires burning at your business and your existing backend systems still get the job done.

But do your current business systems actually get the job done? Technically, yes. But they might be holding back your business and increasingly taking resources to maintain that are better spent elsewhere. Often there’s a burning need for ERP replacement that is killing a business softly, and the only signs are clunky processes and manual data entry that hints at a bigger problem.

Should you replace your ERP system? Here are four good reasons why now might be the time.

Reason #1: Migrating to the Cloud

 

On-premise software is still widely used, but it isn’t news that the cloud is the present and the future of business.

Your company almost certainly is leaning on cloud solutions already, but some of the greatest advantages of the cloud are unavailable until a business has migrated its backend systems to the cloud.

That’s because the cloud is all about access and interconnectivity among in-house and third-party systems. On-premise ERP has evolved to include connectivity with cloud services, but this interconnectivity is an inadequate add-on compared with ERP solutions built and hosted natively in the cloud. Employee connectivity also is a lot more robust when a company’s single source of truth is based in the cloud.

Reason #2: Outdated Technology

 

Technology moves fast. ERP typically does not (at least when it comes to on-premise solutions).

Businesses that invested in ERP or on-premise solutions five or more years ago are held back because many of the technologies that improve velocity and faster decision-making weren’t available when these older systems were put in place.

Artificial intelligence and advanced analytics are key components of competitiveness today, and older systems weren’t built for these technologies. Smartphones, tablets and mobile POS have gone mainstream, but older systems are rooted in a time before such technologies. Real-time reporting, connectivity and automation with online services and third-party suppliers is critical now, but older systems don’t keep up.

Your business needs current technology, and if your backend solutions are rooted in legacy systems, it is time to replace your aging ERP system. Old technology is reason alone to put a new ERP system in place.

Reason #3: Maintenance Issues

 

Upgrading legacy ERP might be the definition of Hell. Patching, upgrading, testing, maintaining hardware and evolving systems to meet current business requirements is a significant IT chore fraught with headaches. That’s why older ERP systems don’t get upgraded enough.

This is such a consistent issue with older systems, one of the huge selling points of modern, cloud-based ERP is the almost complete elimination of maintenance headaches.

Cloud ERP solves the maintenance headaches by having the cloud vendor handle system maintenance. Businesses no longer have to maintain hardware or software because, like other cloud software solutions, the vendor keeps the product perpetually updated and tuned with the latest technology. Businesses just use the software, they don’t need to upgrade or maintain their core ERP system.

While this hosted aspect is marginally useful for word processors and other software that is simple and doesn’t need to evolve much, it is a massive improvement for a core system that is complex and must continuously evolve to connect with other computing systems.

Reason #4: Moving from Spreadsheets to Integrated Financials

 

Spreadsheets are basic and essential. But the technology is more than 30 years old, and business has outgrown unconnected spreadsheet that require manual entry and are inherently disconnected from operational data.

Businesses of all sizes, even small startups, benefit from using financial software that is fully connected with all aspects of operations and updated in real-time. ERP solutions enable greater visibility (for those granted appropriate access, of course), end-to-end financial automation, and more robust functionality than spreadsheets or standalone solutions such as QuickBooks.

Often we see CFOs leading ERP implementations because modern ERP systems not only improve financial performance, they also represent a huge improvement in financial operations. That’s why we have put together an ERP Implementation Guide for CFOs.

The Journey Starts with Assessment

 

For businesses considering a new ERP system, the journey starts with understanding current business processes and truly making the case for a new system.

This thorough review of current and future needs, and business processes today, is an important step not only for improving efficiency and deciding on a new ERP system, it also is the foundation for a successful ERP rollout. Because ERP is a core system that touches all areas of a business, this is a key component for a sane system replacement that meets requirements, stays in budget and rolls out on time without significant operational hiccups.

Navigator has helped with more than 500 ERP implementations over the past 20 years, and from this experience we’ve put together a workbook that helps businesses start the planning process and see if a new ERP makes sense.

You can download our ERP Evaluation Guide here.