4 signs that it is time to replace your ERP system

The enterprise resource planning (ERP) market is evolving at a rapid pace as a result of technology innovation. At the same time, most businesses are changing themselves as they try to keep up with the frantic pace of business in the digital era.

That means that you should always be keeping a close eye on whether your enterprise business applications are keeping up with the changes in your business and its environment as well as whether you are taking full advantage of the today’s technology. It is a good idea to do a frequent gap analysis to see whether your ERP system still meets your needs.

Did you buy it before cloud and mobility disrupted the IT software industry? Did you implement your solution when your business was much smaller? Have you gone through a big change like a merger? Chances are that you could benefit from new technology.

Here a few points to consider:

1. Obsolete or fragmented systems

If you experience frequent downtime in, or response time for, your system is slow, that’s a good indication that is starting to age or that it cannot cater for your growing base of users or volume of transactions. You might be encountering architectural limitations such as the type of database or the network configuration your system can accommodate.

A lack of functional integration between different systems – your manufacturing and financial platforms, for example – is another red flag. This might make it difficult for you to access timely and accurate operational and financial data that helps you make better decisions.

2. Functional limitations

Your company might outgrow its system because it acquired another company, introduced new products or expanded its manufacturing or distribution chain. Such changes could bring with them new needs such as multi-site material requirements planning and inventory transfers, multi-company consolidations, and foreign currency accounting.

Your legacy system may not be able to handle the complexities and collaboration requirements in Bills of Material (BOMs), engineering changes, purchasing, production scheduling and outside processing. Lost traceability and weak cost accounting may also be cumbersome.

Or your legacy system vendor might not elegantly support digital features such as a web storefront or mobile app to allow customers to submit orders and check on their status around the clock. Such limitations can put you at a competitive disadvantage.

3. Voids in enterprise performance feedback

Reporting and analytical limitations are other signs that an ERP system should be replaced. Systems like Sage ERP X3 have numerous pre-written reports integrated with a powerful report writer such as Sage Financial Intelligence and business intelligence tools such as Sage Enterprise Intelligence.

Automated workflow is a functionality found in more sophisticated ERP systems that sends an e-mail alert when a certain event occurs, such as when a customer’s account becomes 60 days past due.

4. Lack of mobility

The advent of Smart Mobile Devices such as smartphones and tablets has really revolutionized the concept of mobility. Modern ERP systems have been designed to take advantage of this convenient and affordable mobility whether it’s in the operational areas of sales and service or delivering intelligent and timely information for decision making purposes and approvals.

Image: melanie cook via Flickr.