Got ERP red flags? Manufacturers who took advantage of enterprise resource planning systems from previous decades now face aging legacy systems nearing or at the end of their productive lifecycle. Your enterprise might have met the limits of your legacy system and surpassed them. At their deployment, these now outdated solutions promised increased productivity, reduced waste and improved output quality.
Is your ERP system still keeping its promises?
The manufacturing landscape is awash in legacy, unimproved enterprise resource systems with none of the advantages of today’s versions featuring cloud-based technology and faster, more efficient processes, greater power, and more intuitive interfaces.
How do you know if you can squeeze out one or two more years from your solution or if it is costing you scarce resources with its inefficiencies? Can you afford to migrate to a new solution? How does a new ERP fit with company priorities and demanding projects?
ERP Red Flags to Watch
To get your organization position on the right path, be aware of these red flags associated with your current ERP solution. While not an exhaustive list, these five points can signal that you need you to move in the right direction and begin the journey of ERP selection.
- Your current software vendor can’t easily provide adequate support, upgrades and maintenance. If you’ve used the same business software system for many years, chances are you’ve received notice that your software vendor is going out of business or has been acquired and no longer supports the system. If that is the case, it’s definitely time to change.
- It hast been more than four years since you’ve upgraded your current ERP solution. According to researchers at Forrester, approximately half of companies using ERP systems are currently on releases that are two versions behind the current release. We’ve seen other research that shows that more than half of the 40,000 mid-market manufacturing companies operate with outdated ERP systems. Relying on an ERP system that is outdated, or one that has only been upgraded every four or five years at best, makes it difficult to manage change and maintain competitiveness in an uncertain and volatile market.
- Your current software system can’t scale to support your company’s growth plan. Most legacy systems do not offer the functionality that allows you to scale your business. For example, you might require a system that supports multiple languages and currencies because of you international expansion. Other functionality such as multi-plant, bar coding, CRM or WMS capability can also help you meet today’s business demands. Similarly, new Business Intelligence features are critical for organizations to compete and operate efficiently. BI provides the right information, to the right people, at the right time for effective decision-making. Mobile access for a variety of devices is also now a strategic requirement. Most legacy systems fall behind in all of these areas.
- Team members are forced to use “work-arounds” outside the current ERP software system. This is a big problem. If the team performs tasks outside the ERP system, such as double entry work, cutting and pasting reports, walking blocks between plants or warehouses to record/deliver shop floor information, then it is most assuredly time for a new ERP system. These manual and redundant efforts result in major inefficiencies, waste and cost.
- Only a few IT people know the current system. Who within your organization is familiar with the legacy system? Whether it’s custom code or a heavily modified software package, there might be only one or two people who really know the “nuts and bolts.” That brain trust will be hard to replace. You’re vulnerable when those folks decide to leave or retire and there is nobody to internally support the out-of-date information system.
Seeing any ERP Red Flags?
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After assessing your situation and performing a business process review, it’s possible to come to a conclusion about your current and future needs, timing and how to take the next step.
The search for a new ERP system requires careful planning, research and discussions with management, the various ERP vendors and ERP consultants.
By addressing the ERP red flags above, performing the required research on new ERP technologies available and motivating the team for change, you can look forward to success with your ERP initiative.
An ERP selection project is a major undertaking and one that deserves serious analysis of the value and risks associated with it. Manufacturers are wise to partner with an expert ERP consultant to streamline the selection and implementation process.
Looking to get rid of your organization’s ERP red flags? Take a closer look at the white paper Five Guidelines for Choosing the Right ERP Consultant.