The purpose of an agile enterprise resource planning (ERP) implementation is to allow your organization to become more efficient. Do you think your legacy ERP system may be slowing down, rather than speeding up your organization’s productivity? If so, below are some clear indicators that your current ERP software solution might not be up to par.
4 Reasons Why Legacy ERPs Hinder Growth and Productivity
It’s not uncommon for management to balk at the thought of ditching their legacy ERP system and deploying a new Enterprise Resource Planning (ERP) solution like Microsoft Dynamics, or NetSuite. Thanks to publicized ERP solution failures, coupled with the perception that ERP systems are expensive, developing a legacy system migration strategy seems like a daunting task. Unfortunately, putting off the ERP selection process can wreak havoc on efficiency and productivity. Here are four reasons why continuing to use legacy ERPs will likely result in stagnant growth and lost profits.
1. Data is Not Provided in Real Time
If your company is dealing with a large volume of inventory orders, sales, customer interactions, etc. it’s necessary that you can see and respond to data in real-time. In many cases, legacy ERP systems don’t update automatically and prevent or delay you from taking immediate action.
2. Too Much Manual Input
Are you having to manually input data? Just about all modern companies rely on the Internet or other technology-based interfaces in order to interact with customers and vendors. Having to manually input this kind of data is time-consuming and inefficient, and an updated ERP solution can help automate processes.
3. Inability to Configure According to Your Needs
Your agile ERP solution should be configurable to meet the individual needs of your company. If you find yourself always thinking how nice it would be, or how much time it would save if your on-premise, or legacy ERP solution could do such a thing it might be time to consider an update. A good ERP system will allow you to adjust the software accordingly for your company needs. In addition to configuration, a good ERP system should also be able to adapt to change. If your current ERP system can’t adjust, or scale to additions such as new warehouses or more customers or employees, it’s time to move on.
4. Requires the Use of Too Many External Resources
The main point of an agile ERP software solution is to allow you to access and store your company’s data on one collective platform. A good ERP system will allow you to integrate external sources and build out a single source of truth for your data. If you’re finding that you have to use other external sources either because your ERP system doesn’t provide those services or because the services provided are inadequate and you are unable to seamlessly integrate with your legacy ERP, you may have outgrown your current system.
Other Reasons to Update Your Legacy ERP System
Aside from the four reasons above, there could be many indicators that your business needs to update their legacy ERP systems. If your organization is having problems with one, or any, of the following core processes, it may be time to consider an upgrade, or new agile ERP implementation:
- Financial & Operational Reporting
- Debits, Credits, & Payroll
- Network & Web Traffic
- Procurement & Planning
- Inventory Management
- Shipping & Payments
- Manufacturing & Production
No Organization Too Small for an Enterprise Resource Planning Solution
We’re often asked, “Is our business too small for an ERP solution?” The answer is likely not, but a review of core business processes can reveal whether your organization would benefit from an agile, integrated ERP system. For example, some form of contact management exists to keep track of customers, some form of accounting tool exists to manage finances, some form of tracking exists to trace and manage mission critical processes (distribution, manufacturing, bill time, engineering, etc). It’s simply no longer enough to have multiple stand-alone systems; data must flow from one system to another without requiring human intervention (and possibly human errors). The efficiency gains of the integrated ERP system come from the automation of business processes coupled with advancements in artificial intelligence.
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