You are a business owner who is looking for a suitable solution for your business to manage everything from a single dashboard. ERP systems offer you that but you are not sure whether you should invest your money in buying an ERP system or not. You decided to do some research on internet and came up with hundreds of articles telling you about the benefits of an ERP system.
This changed your mind and you decided to buy a new ERP system. After few tough weeks, you are able to fully implement the ERP system and it start functioning properly. Just like anything else, it starts to degrade over time. Few years later, you are left with an ERP system that barely functions and has become counterproductive.
Does all that seem familiar? If yes, then you are not alone. Most businesses with ERP solution face similar situation. In this article, you will learn about seven warning signs that tell you that it is time to replace your ERP system.
1. Changes are Costly and Time Consuming
One of the most prominent signs that your ERP system is outdated is that vendor will stop supporting or release updates and bug fixes after years, not months. Software vendors tend to support their newer products more often, pushing faster updates but same cannot be said for older legacy systems. This is not only a software based issues as hardware such as affordable dedicated servers tend to face similar issues too.
Even when the updates arrive for your ERP system, it cost you an arm and a leg and take a month to be implemented. If your software provider is not releasing updates for more than a year, it means that your ERP system has dropped off their list of supported products. Using an outdated product also poses some cybersecurity threats as older software tend to contain more vulnerability which can be exploited by hackers.
2. Still Using Tapes
Let’s talk about a worst case scenario. What would happen if your servers and data centre catches fire or comes under a natural disaster which leaves them unusable? How would you recover your data? From tapes! How much data would you lose in case of hardware failure? A lot! How much time would it take to recover your data and get back to normal? Weeks! If that is the case, then you have a decade old recovery plan. It’s time to move on to newer and better systems.
3. Resource Hungry
You have noticed that your ERP system is demanding more resources to run smoothly than it use to when it was first implemented. Does your ERP system forces you to install fat clients and purchase state of the art computers? If yes, then it will skyrocket your overall cost. It is better to switch to a new ERP system than sticking to an old one, which continues to cost you money.
4. Upgrades Disrupts Your Business
OK I got it. My ERP system is outdated so why not upgrade it. The problem with upgrading antiquated ERP systems is that it can bring your business to its knees and halt everything. As a business, you cannot afford downtime as every hour your system is offline, you are missing out on important transaction which would cost you millions if the downtime prolongs to days and weeks. You need to get a solution which can be upgraded in the background without hampering your day to day operations. If your existing ERP system doesn’t allow you that liberty, it is time to replace it with a newer and better one.
5. High Maintenance Costs
Another indicator that shows that your ERP system has passed its prime is rising maintenance cost. If you are frequently spending money on your ERP system, then it is better to swap it with a newer one. There is no point in spending money on an old system which is not delivering results. To add insult to the injury, ERP solution providers regularly increase the prices of maintenance for their older products which are no longer covered by them. This can create problems as your IT expenses start to surpass your budget. For instance, SAP charges you 22% of license cost as maintenance which is quite high but when you factor in cost of living index adjustments, it can go even higher overtime. That is why it is important to compare different contracts offered by ERP solution providers and choose the one that offers you best bang for your buck.
6. Steep Learning Curve
Most employees might resist change of ERP systems because they have become acquainted with the existing system. That is why most of these employees will oppose your decision of switching to a new ERP system. The reason is that they will have to start from scratch and learn everything about the new system before they can get used to the new system. On the flipside, a new employee might feel in alien territory when he or she have to interact with your existing ERP system especially if it differs from the system implemented in a company from where he or she is coming from. The steep learning curve makes their lives tough, which could result in higher employee turnover rates especially amongst new employees.
7. Remote Access Is Not Working
Your current ERP system might give you quick access to your critical business data but what if you are traveling? Do you lose access to your data? Is remote access not working properly? If the answer to both these questions is yes, then you are in hot waters. There is no point in sticking with an ERP system that could not give you basic facilities like remote access. Does your ERP system have a mobile application? If it does not, you might not be able to access your data while you are on the move.
Which warning signs do you look for before replacing your ERP systems? Feel free to share it with us in the comments section below.