It is vital that companies consider why they want to evaluate the software they are using. Have operations outgrown the system they are on? Are employees calling for a change? Or is the company hoping to save money?
These are just a few examples of the dialogue leaders must have when determining their software future. When there is a need for an upgrade, examine whether the cost and disruption will be on par to implementing a new product. If so, it may be time to shop around and evaluate if there are newer, better options than your current software. If the current system is meeting all needs, maybe pump the breaks on making a change. ERP software upgrades are time consuming, as well as financially consuming, and require employees to buy in to the mission, so if there is no need for a complete change, then taking the upgrade on your current software probably makes sense.
Occasionally, companies attempt to save money by changing to a new product to get out of a bad contract from the past, but they neglect to research the all-in resources required to implement new software. Of all the reasons to change software, saving money rarely is enough of a driver to make the case, especially if users are mainly satisfied with how their software works.
In all, ensure that the reason for upgrading will drive real benefits and outweigh the costs, otherwise, do not do it.
Have key employees across the company bought in to the change?
Human capital is one of the most important resources to a business. Big changes, especially in operations, can heavily affect organizations and the people within them.
Organizations must always consider the impact software changes and implementations can have on employees of the business. Some employees will be unwilling to change from the system they have been using their entire career. It can make it difficult to leave old habits behind – people don’t “want to have their cheese moved.” Other staff may be worried a new system will make their role obsolete. Few of our clients are able to rationalize a reduction in headcount with their ERPs, so a good change management plan may allay those kinds of fears.
Ultimately, though, if the change is warranted yet some folks are unwilling to get onboard, management must be prepared to lose some of the resistant employees. Conclusively, if those individuals are not on board with the company’s greater good to expand, then it probably won’t be a real loss anyway.
An upgrade may be a necessity in an ever-changing business landscape. Benefits for new systems are wide-ranging including better automated reporting, dashboards, reduced manual processes which eliminate error-prone spreadsheets, automated workflows for basic processes like purchasing and accounts payable and better integrations to other enterprise applications like Financial Planning and Analysis, Configure Price Quote, CRM, eCommerce, banks and EDI.
Companies may find themselves needing to upgrade from their legacy software due to limiting customizations making it impossible for them to accept the upgrade of their legacy system. In this case, you will find you must re-implement the existing product if you wish to continue the upgrades and maintain annual support. If there isn’t a clear business case to migrate to a newer ERP, then do realize that a brand new implementation will require data migration, setting up integrations all over and either rebuilding the previous customizations or adapting manual processes to prevent a future state of over-customization.
Organizations also find themselves at an impasse when they miss a previous update on their legacy software, either intentionally or unintentionally. Missing an update can prevent you from buying premium support options. This creates a scenario similar to the previous one where you will have to re-implement the same software all over again, starting from scratch with a “vanilla” configuration, rebuilding your customizations, integrations and migrating your data.
Modern systems tend to be extremely user friendly, contributing to better user adoption, with employees adapting to the improved user interface, increasing employee retention due to having better tools to do their job.
We see heavy demand for systems which can synergize functions across disparate business systems which occurred from merger and acquisition activity. Sometimes there is a case for merging all businesses onto one system that can accommodate sales, orders, inventory or services, manufacturing and distribution activities. Yet in other merger and acquisition models, owners are creating a universe of brands and related services to offer to the same customer base. in that case, it is not an obvious decision to merge small distributors on legacy ERPs onto the same application as their sister manufacturers who have a different legacy ERP. Depending on the requirements will depend on the right direction for leveraging new software solutions. Some clients have opted for a sophisticated financial tool to consolidate financials information from dozens of global entity’s ERPs while other global companies opt for an all-in-one solution to handle everything from human resources, payroll, services, invoicing accounting and financial reporting.
In all, when there is a need for change from your legacy software, there is a myriad of possibilities for growth and expansion, but it can take numerous steps to get there. If at any point a snag occurs, please reach out to ERP Advisors Group for independent and objective advice on your software strategy.