Every day we hear horror stories daily about ERP systems that are so outdated or have become so convoluted they are causing more trouble than the value they provide to the business. Technology has been advancing at an alarming rate and legacy systems are having difficulty keeping up. New functionality is available on a daily basis creating opportunities for competitive advantage, and the time may very well be right to look at replacing that legacy piece of junk.
However, before you simply rip and replace your ERP, take a close look in the mirror and make sure that you are evaluating the bigger picture. Even if you think that one of the top ERP systems might help your situation, here are a few considerations to reflect on before replacing legacy software:
More than likely your business requirements are not what they used to be. Whether driven by customer or market demand, new product lines, increased regulations, modified supply chains or the like, successful businesses are in a constant state of flux.
Most businesses are also relatively lax at updating their technology accordingly. Even “old” software can generally be reprogrammed to an extent, so validate first if your technology is able to manage your current processes. There may also be opportunity to modify processes to a degree to fit within the constraints of the system without sacrificing benefit. This may be much less pain than replacing your ERP.
The term “Post Modern ERP” suggests that businesses are moving to a more fragmented set of solutions tied to a core “ERP”. Ease of integration allows businesses to keep their core technology and build functionality through niche applications that may include the likes of HCM, CRM, QMS, etc. We have seen many businesses extend the life of their core technology platform with this approach.
Technology will never stop improving, but jumping on every new bandwagon can get very expensive. Those of you who “need” a new car every year understand what I’m talking about. Make sure there is a supporting business case for an ERP replacement before going through the process. It may be a matter of completing an ERP software evaluation process to understand the full cost vs. benefit.
An evaluation is certainly necessary if you are going to replace your system and can also help avoid a costly mistake if it is determined the business case does not support a new ERP. This is why it is critical to engage and software agnostic ERP consulting firm to help with your evaluation and not a solution provider.
As Depeche Mode stated so eloquently, we need to remember that at the heart of all companies, processes and technology decisions come people. People carry opinions that don’t align with others, people get frustrated and make rash decisions, people get lazy and people try to protect their own space and power. Decisions as significant as replacing an ERP cannot rest on one person, and the impacts on people need to be evaluated along with the technology.
Make sure an ERP evaluation considers and balances the human influences that have led to the current state and requests for a new system. Change management should be an integral part of your project, beginning with the ERP evaluation stage.
Ultimately you may very well need a new ERP. The justifications for new technology are significant, just be sure the timing is right for your organization. Feel free to contact me if you are looking to brainstorm ideas about your potential ERP replacement. I am happy to help!