7 Ways Your Legacy ERP System is Holding You Back

Can you count the ways your legacy ERP system is holding you back?

Most of the organizations we speak with are running at full throttle managing operations, production, supply chain, ordering, inventory and other key areas.

Taking the time to strategically analyze whether current business process systems are being effectively managed is often a challenge.

Is the current ERP system performing, and driving true business performance?

That’s a key question.  In addition, it’s worth asking: How will the company prepare for tomorrow’s opportunities when the team is busy fixing yesterday’s problems?

To help gain an understanding and insight, here are 7 ways your legacy ERP system is holding you back.

1 Over-reliance on manual record keeping

Obviously, a company’s ERP users are dedicated resourceful people and as such they want to be as efficient as possible. When ERP is not meeting their requirements, or the system doesn’t support their process well enough, they will turn to other means of operation.

We often see a multitude of home-grown and  paper-based documents and folders in use. This impacts  the accuracy of information that is needed to respond quickly to today’s fast paced key performance analysis and  exception-based management reporting across the enterprise.

When information is needed, it is found in multiple formats within multiple departments. Relying on manual records, task lists and folders is a drain on resources and often results in conflicting information, or in worst case – incorrect information that cannot be trusted to guide vital strategic decisions.

2 Siloed systems

As businesses change and grow, it is often the case that an ERP system that was tailored to the business a few years ago no longer meets the new requirements. As independent ERP consultants, we’re in a position to witness this scenario quite frequently.

Many departments under-served by the legacy system turn to stand-alone applications that are most often disconnected from the ERP. The result is disjointed processes that break the flow of data across the enterprise. Siloed systems sometimes make sense in situations where integrated data is not needed for decision making, but “detached” solutions can cause a breakdown in inter-departmental efficiency, and create multiple versions of the vital data that is used further upstream or downstream in the process or transaction cycle.

Spreadsheets are excellent for data analysis – but not effective in business process management.

3 Depending on spreadsheets

Spreadsheet tools are effective for data analysis and manipulation. Most modern ERP systems have made the download and upload of spreadsheet data a simple “one click” process.

However, the temptation is to overuse, or misuse this capability. When a spreadsheet becomes the tool for executing a process like Production Scheduling or Sales Order Pricing, the value of integrated data is degraded. The system becomes inefficient and ultimately untrustworthy in other processes that are directly related. Spreadsheets are excellent for data analysis – but not effective in business process management.

4 Data availability/Lack of single source of data

What we’ve outlined so far in this post are key causes of gaps in process efficiency.  The outcome of these limitations is that the organization is forced to generate multiple sources of data.

Most organizations cannot function in today’s information based economy without immediate data access, or with multiple sources of data. Like a person with two watches – you can never be sure what time it really is!!!

5 Reporting

Today’s modern ERP systems are geared to support exception-based reporting. If the current system forces the organization to wait until the reports are produced at the end of the day, or at the end of the month before providing insight into the key metrics of the operation, it’s time to move on.

We often see this scenario after performing a business process review.

With real-time or near real-time reports and dashboards, vital performance information is delivered almost immediately to a desktop, laptop, or smart device. Modern ERP systems, through integrated workflow and predictive analytics,  alert of potential problems BEFORE they occur. Business performance measurement is then a real-time experience.

6 Antiquated user interface

If users must spend large chunks of their time reviewing procedure manuals, or having to tab through field after field to enter or access the data that they need, t’s time for a change-up!

Modern ERP systems offeruser interfaces that are easily configurable or tailorable to the user’s preference. Most functions are easily identified through a clearly intuitive interface.  A big benefit here is that these systems require little user training. Modern user interfaces provide a simple experience and ultimately reduce the time and potential errors in data entry.

7 Security Limitations

Legacy ERP systems tend to be less secure due to limitations on field and data element security. Modern ERP systems deliver tighter security controls, often down to a row or column of data.

Role-based tasks and functions limit access to specific data but do not hinder the users from doing their jobs seamlessly.

Modern security features not only reduce the risk of data breaches, but provide more powerful audit and control features that reduce audit and/or compliance expense.

Ways Your Legacy ERP System is Holding You Back: Next steps

This overview provided the top ways your legacy ERP system is holding you back.

As we’ve noted, it’s important to ask how an organization will prepare for tomorrow’s opportunities when the team is too busy fixing yesterday’s problems.

By approaching this analysis as a strategic process, it leads to setting ERP selection criteria in an informed manner. Learn more – contact Ultra today.