10 Questions: Does Your Company Need a New ERP? And Is It Ready to Do It Successfully?
Whether your existing ERP system is at the end of its lifespan, your vendor is sunsetting support for your current version, or you feel you’re not getting enough value from it, moving to a new ERP system is a big undertaking.
So, before you take the leap, make sure you need to replace your current solution, and determine that your organization is ready.
Four questions to ask before you get started:
1. Does your current system lack capabilities you need?
If you’re running an old ERP system, that’s not necessarily a reason to scrap it. However, if it’s been in place for more than 10 years, you’re likely missing out on important capabilities, including real-time data access, AI and seamless integration – and business opportunities that can be unlocked with new technology.
2. Does your organization need better data integration?
Most enterprises use CRM, accounting, marketing automation and other applications to run the business. If these systems aren’t integrated, you’re unable to make decisions based on real-time information and use data to monitor operations and drive product development. A lot of companies will cobble together ad hoc integrations to keep data flowing between systems, but these integrations are brittle and require constant maintenance.
3. Are upgrades difficult or impossible?
The older a system is, the more it’s been customized – often by employees who have left the company, taking their knowledge with them. As a result, when your ERP software vendor releases a new update, not only do you have to test everything to make sure the update won’t crash the system, you also have to identify every customization beforehand. Excessive and extensive customizations can even make an upgrade impossible altogether.
4. Can decision-makers get the data they need?
Stakeholders often need accounting reports, like P/L statements, to make decisions. If the accounting department must run these reports, then decision-makers must request them and wait. This is extra, unnecessary work for the accounting team. And it means that critical data is not in the hands of those who need it when they need it.
Of course, needing a new ERP is one thing, and being prepared for it is another.
Here are six more questions to ask to determine your organization’s ERP readiness:
5. Are your business processes messy?
To get the most out of your ERP investment, you’ll need to have efficient business processes. In many organizations, business processes have evolved over time with little or no documentation, even for something as simple as approving purchase orders. If you don’t know what the steps are, it’s difficult, if not impossible, to set up the ERP system to meet the demands of your business.
6. Is your data dirty?
The longer you’ve had an ERP system, the more likely it is that you’ve collected duplicate and outdated information. Before you can move data into a new system, you’ll need to eliminate duplicates and make sure what you import is correct to avoid hindering your decision-making, customer service and other procedures.
7. Is your existing ERP preventing change and improvement?
If your business plans to expand its market share, you likely need to look at a new ERP system. And if the goals of the business require using real-time data, offering mobile access to employees, or integrating with new technology like IoT, an outdated system likely can’t support those capabilities.
8. Will employees be on-board?
It’s unlikely that your employees will be excited about changes to their day-to-day work processes and the need to learn a new system. But if they’re complaining about how long it takes to conduct simple business tasks, they may not resist change as much. Communicating the benefits of the new system and offering proper training will go a long way toward getting them fully on-board.
9. Will leadership champion a new system?
No new ERP system can be successfully adopted without enthusiastic, committed leadership. Make sure your executives understand the business benefits of the system. And make sure to secure the necessary executive sponsorship for the project.
10. Is your company able to successfully complete the software selection and implementation processes?
An ERP replacement requires evaluating multiple solutions to make sure they are the right fit for your organization, then undergoing data cleansing, business process improvement and other complex tasks, followed by the software implementation itself. These lengthy and often challenging processes probably should not be done using an in-house team. Experience shows that few companies have the knowledge and expertise required to achieve success.
Software selection and implementation processes often present challenges of their own. To steer you around trouble and help you drive success, Ultra’s experts compiled a list of pain points and solutions to be aware of as you embark on this journey.
Joe brings more than 30 years of global manufacturing experience – and an industrial engineer’s perspective – to operations, planning, process improvement, supply chain and ERP implementation management.