You Know Your ERP System is Outdated WHEN.....

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Executive decision making was discussed recently in a Forbes article.  According to the article, the keys to making sound, strategic leadership decisions include:

  • Situation analysis
  • Conducting a cost/benefit analysis
  • Assessing whether it is the "right" thing to do to achieve your objectives
  • Making the decision

This decision-making criteria can also be used when evaluating new technology solutions for your organization. For example, the following key questions can help you to determine if your existing ERP system is ready to be replaced:

Is your current ERP system older than 7 years?  As we noted in a post last May ("When is the Right Time to Replace Your ERP Solution?"), many organizations replace their ERP systems every seven to ten years. According to an Aberdeen report, ERP systems over seven years old have substantially reduced benefits in administrative costs, utilization of resources, reduced waste, and time to decision.  Technologies in the “sweet spot” of 2 to 7 years far outpace the older ERP systems in these areas.

What grade would you give your current ERP’s performance?  When you look at operational issues, maintenance costs, downtime, system response time and overall operating expenses does your ERP meet your expectations or is it lacking?

Do you use third party extensions?  If your business has turned toward third party providers to extend the capabilities of your existing ERP system by providing added functionality and/or improve system performance, it could be time to examine a newer solution that includes these capabilities.

Will adding a new location or introducing new products overburden your current ERP system?  If your ERP no longer scales to meet your business demands it is probably time to explore new options.

Is your ERP system significantly behind on software releases and patches?  If it has been more than a year since you have applied any upgrade to your ERP software, you could be missing critical components that have been failing for some time.

Is your current ERP provider going downhill?  Are there indications that this provider is going out of business or on the decline?  This would be a red flag to begin moving towards a more reliable and sustainable solution.

Can your ERP easily integrate with new systems?  As we indicated earlier this year in the post the "Top 6 ERP Predictions for 2013" include an emphasis on interoperability between ERP and related enterprise solutions - such as CRM. If the thought of integrating any existing application with your current ERP system gives you nightmares, you should explore other flexible ERP solutions that are designed to seamlessly integrate with other applications.

Is your business moving towards mobile?  As more businesses incorporate the use of smartphones and tablets into their normal work routines, ERP solutions need to have the ability to support mobile devices.  If your current ERP provider has no existing mobile strategy, it could be time to look elsewhere.

After reviewing these questions you now should make your decision.  Should you keep plugging away with your current ERP system, or is it time to explore new solutions?

Modernizing your ERP solution will help you to gain (or regain) a competitive advantage while also reducing expenses and increasing productivity.  To take a deeper dive for a more detailed assessment of your ERP needs, it is wise to work with a partner that has a strong knowledge about the various ERP solutions and can provide options that meet the needs of your business.  You may want to look for human resource management or integration capabilities, or you may need to add shop floor integration to your ERP solution.  There are numerous options available and it is best to team with a strategic, knowledgeable partner that can guide you through the analysis and help you make the right decision - that fits both your current and future needs.

by Green Beacon Solutions

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