Does your company need a new ERP?
How to evaluate and decide the need for a new ERP using the six elements
No matter what business or segment you work at, at some point you will ask yourself: "Does the company need a new ERP or should we continue with the current one?"
It is not an easy question to be answered. If you decide to keep your current system, you may risk falling behind in terms of technology and functionality.
On the other hand, if you decide to change your ERP, you will face great investments, you will experience various types of setbacks in the organization and will still run the risk of implementation failure.
The 6 elements for transformation
Business Processes – Business processes based on older and more inflexible ERP systems become limited.
Change Management – Communication among departments is poor and lacking innovation and standardization of better practices.
Systems Technology – Technology becomes obsolete, hindering integration and causing loss of strategic technological advantage.
Software Supplier – Changes in software supplier, such as mergers and acquisitions have a direct impact on software resources and its orientation.
Reports – Older systems are often full of information that can not be accessed without having consumed a significant amount of time, energy and effort.
Total Cost of Ownership – The total cost of ownership of the current system justifies the cost of acquiring a new system.
If your company has faced challenges in these areas, consider selecting and implementing a new ERP.
How to evaluate and decide the need for a new ERP using the six elements
What is the right answer for your company? Over the past 14 years, EBS has helped some organizations going through the process of selecting software.
The process of evaluating of each company considered the analysis of specific problems. Each one of them had different reasons to continue with the current system or to make a change. In many cases, the decision was made with the help of the six elements.
- Business Processesclick and check
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We recently asked the CEO of a large multinational organization, why they were changing their ERP. "To improve our business processes," he said, stating that one of the biggest companies in the world needed to change their ERP.
As you evaluate your ERP in relation to business processes, you should first examine which incorrect / ineffective business processes are caused by your current ERP system, and then identify the number of parallel processes that systems users created to work with ERP .
If you have experienced problems of significant processes in these areas, a change to a modern ERP can be beneficial to your organization.
- • Incorrect Processes Resulting from ERP System
- • Creation of Parallel Systems
- Change Management click and check
- Systems Technology click and check
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The software technology changes rapidly. A great example of this is that in just a few years, user interface technology has progressed from the green screens of the 80's to the graphic interfaces "point and click" from 90's Windows, and then to the visual web browser with hyperlinks and search bars that we have nowadays.
That means you need an ERP system which follows the new technologies, so that you can remain competitive.
The elements in the decision of your assessment of your ERP's technology are:
- • Integration
- • Support Availability
- • Customization
- Software Supplier click and check
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Sometimes the reason a company changes its ERP has no relation with the software itself or the business processes associated with it. It has to do with what is happening with the software supplier.
Two main factors have a great impact on the decision of many companies to switch to a new system: the software development and support of the supplier, and the effect of a merger or acquisition of a supplier.
- • Software Development and Support
- • Acquisition of ERP Suppliers
- Generating Reports click and check
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The generation of reports is one of the main reasons why companies adopt a new software system.
Older ERP systems, collect data very well, but have difficulties in retrieving data for reporting. In order to transform an ERP into a strategic asset, the data residing in the system needs to be arranged in a practical way to make well informed decisions on time.
The main issues faced by companies in respect of reports are:
- • Ad Hoc Queries
- • Delays in Reporting
- • Graphs
- Total Cost of Ownership click and check
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The Total Cost of Ownership (TCO) is the accumulation of all costs - not only software or IT costs - associated to make a system achieve its purpose.
Many organizations have no ideas of what the total costs to operate a system are, because only a few costs are actually tangible and classifiable. Tangible costs such as licensing fees and software maintenance can be easily defined and readily accessible. Intangible costs are not that visible, but they represent costs to the organization in terms of productivity and time.
In fact, if you observe only the tangible costs, a new ERP system typically seems to be the most expensive option. However, when evaluating the TCO of your system, ie, both tangible and intangible costs, you may find that a new system is justified by productivity gains, time savings and increased revenue opportunities that a new system brings.
Tangible costs
- • Software
- • Implementation
- • Maintenance
- • Support
- • Hardware
Intangible costs
If your company has faced challenges in these areas, consider selecting and implementing a new ERP.
Learn how EBS can help transform your business.
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