Have you been using the same ERP software for years? If so, it might be time to ask yourself: Am I using the right ERP software? Before you start googling for software, call your current vendor, or stop reading this post, ask yourself these questions:
Question #1: Am I getting what I want from my current ERP Software?
Growth and expansion can lead to new requirements over time. If you’re managing various aspects of your business in spreadsheets or on paper, the answer is probably no, the software is not doing enough. In addition to meeting core accounting requirements, does your ERP support operations for warehousing and distribution; manufacturing, job costing and more, with data integration across all functions?
Question #2: Is there a compelling reason to change my ERP Software?
You may be content with your current software and processes. The status quo may provide the best balance between cost and benefit, or you may find a new solution will relieve the pain points of your systems. Other times, the decision to make a change is outside your control. The software that was the gold standard 20 years ago may be reaching the end of its life. Rather than adapting old software to current technology, many software companies are phasing out the old and building fresh solutions. (CAUTION: Whenever your existing vendor recommends new software, you should always treat it like a new software purchase and evaluate your options.) Other factors may include changes in the industry, innovations in technology and succession planning. If you are considering selling your business, reliable reporting and name brand recognition may be crucial to the buyer.
Question #3: How much is new ERP software worth?
Before you consider any new software, you need to know how much you are willing to spend. There are software licensing fees, implementation services and training. Initial investment in professional services and increased use of your own staff are expensive. Subscription fees and technical support will be ongoing costs. Know your budget! On the other hand, how much is your current software costing you? Don’t just consider your current software cost. Do you have more employees because you have duplicate data entry? Do you have manual processes that lead to costly mistakes? You should compare the cost of the new software against the cost of inefficiencies, lack of information for decision making and other pain points caused by using the existing software.
Question #4: How does my ERP software affect employees?
Younger employees that grew up with technology do not get excited about antiquated software. Some people will view outdated software as a red flag when looking for employment.
On the other hand, tenured employees may find it difficult to adjust to new software. Data entry on a tablet may be intimidating to a manager who is used to dealing with paper. New platforms often mean new processes and a re-distribution of work. In the big picture, you may see increased efficiency, timeliness of information and better data integrity. At the staff level, you may need to plan for more training, change management coaching and/or a shift of roles and responsibilities.
Question #5: Am I leveraging AI and Cloud Technology?
Everyone is talking about AI. Can AI help your business? While AI can do incredible things, it is important to understand how you can use it, know the actual cost of the services, and confirm the results.
Technology can improve communications and increase efficiency. Is your ERP in the cloud? By outsourcing hardware and software maintenance, you can focus on your core business strengths. Are you taking advantage of newer, cloud-based, and integrated solutions for timekeeping, expense report and credit card receipts, electronic invoice approval, document management and HR Management?
The Bottom Line
The answer to whether you are currently using the right software will be different for every business. Your existing solution could be the ideal solution, and you may want to investigate options for optimizing your current ERP.
If your answers to these questions indicate it is time to look at new software, do your homework before contacting vendors:
- Prepare a needs analysis of your requirements.
- Prioritize functionality.
- Develop a matrix to evaluate and compare software options.
A software evaluation can even include your current software. You may want to include it in your evaluation matrix.
You may find these steps daunting. Between doing your day job and focusing on the core of your business, you may not have the time or experience to properly address the above questions and tackle the next steps. Supplementing your staff with a client advocate can provide the necessary capability and capacity to make the best decision.
Remember, the vendor’s desire to sell their product may take priority over finding the solution that best meets your needs. The most important thing to keep in mind is that the more you understand your own needs, the better you will be at selecting a vendor and the best fit software.