Your enterprise resource planning (ERP) system, whether it’s used for accounting, human resources, supply chain management or other business processes, is intended to help increase workforce productivity and boost your organization’s bottom line.
However, like any technology, it can become outdated and inefficient, preventing your business from achieving all of the above.
How do you know when it’s time for an upgrade? Here are three signs your ERP system might need a makeover.
Sign #1: Your team is suffering from low productivity
While an outdated ERP system likely will not be the sole reason for diminishing productivity and lack of efficiency in your department or organization, it could be a major root cause. For example, are your employees spending a lot of time developing workarounds since the system doesn’t meet their needs?
Another question to consider: Was your on-premise ERP system implemented when your employees worked primarily on-site? (Some legacy ERP systems go way back.) If so, you might need to bring technology up to speed to accommodate a modern anytime, anywhere workforce. (See Sign #2.)
Sign #2: You aren’t in the cloud
More companies are embracing cloud-based solutions for ERP. In fact, fewer companies than last year are using an on-premise ERP system as their primary financial system, according to the Benchmarking the Accounting & Finance Function report from Robert Half and Financial Executives Research Foundation (FERF).
Some business leaders are still hesitant to move key processes to the cloud, especially financial systems. But cloud-based ERP solutions offer numerous advantages, including real-time system upgrades and, in some cases, lower maintenance costs.
Keeping your ERP tied to a local server also puts your business at risk of data loss due to errors, malfunctions or even natural disasters. Moving your ERP to the cloud can add a layer of security for your data. Plus, your team members will be able to access the information they need anytime, from anywhere. (See Sign #1.)
If you’re still uncomfortable with cloud-based financial systems, consider a hybrid ERP approach. With this option, your organization can keep extremely sensitive data on-premise while moving other components to the cloud where they can be accessed securely by authorized users. According to Gartner, almost half of large enterprises will have deployed some type of hybrid cloud by 2017.
Sign #3: Your ERP system is too complicated
Bottom line: An ERP system should streamline business processes and make accessing and managing data easier for your staff. However, if your employees are working with an outdated legacy system, it’s likely they find the technology time-consuming and burdensome to use.
Before you upgrade, take time to speak with employees who will be working with the solution regularly. Find out what they loathe — and just as important, like — about the current system. Their input will be invaluable when selecting new or enhanced capabilities for your ERP system.
Be sure to set aside time for formal staff training on the upgraded system, as well. Even if the updated system is vastly more user-friendly than the current version, your team will still need time to adapt to change. Find out if your ERP provider offers training, and if not, research other options.
Keep an eye toward the future
Major ERP upgrades can be resource-intensive — and disruptive — which means they’re not something you want to have to do often. It’s therefore important to choose an ERP system that has the ability to adapt and evolve with your business.
Look for an ERP system that integrates business intelligence, workflow, communication and collaboration across all of your company’s core functions. The solution should also work harmoniously with your existing office applications, email, mobile devices and other business systems.
And don’t forget the past when upgrading: You want the ERP system to have your legacy data available for future data mining for business intelligence, as well as potential compliance requirements.
Once you’ve decided it’s time to upgrade your ERP system, consider working with expert consultants who can help guide the implementation process. They can also identify opportunities to optimize the system and ensure that it has the capacity to grow along with your business.