Many companies approach us when they are looking to evaluate a new ERP Solution for their business.
One of the key reasons is that management and staff feel disappointed with their current ERP Vendor. There are usually common themes including:
- The current system is 10 – 20+ years old and no longer meets the changing requirements of the business users.
- The technology platform is outdated and support from the ERP Vendor is diminishing or no longer available. New technologies are not easily able to be utilised or integrated.
- The business has outgrown the solution and it isn’t able to scale to accommodate growth.
- Users have an overwhelming impression that the current legacy system doesn’t work properly.
- The relationship with the Vendor has broken down due to management changes, a merger or acquisition by another organisation.
- Change in staff and lack of training and documentation means that most of the information, especially management and financial reporting is being done “outside” of the central ERP.
- Key functionality needed by the business is missing.
”For some of our clients, it is very clear that their existing ERP system will no longer support the growth of their business and they absolutely need to go to market and evaluate a new ERP.
However, for other clients, it makes sense to explore whether there may be alternative options available
What are your options?
If you want to improve your operational effectiveness, reduce costs or improve your customer and staff experience, you may not necessarily need a new ERP Solution. It may be more cost-effective and lower risk for you to remain with your incumbent ERP Vendor.
Consider the following options:
1. Remain with your Current ERP Vendor
- Upgrade your existing solution to the latest version of the software to take advantage of new functional enhancements. Your current Vendor may have acquired or developed new products in their portfolio that you may not be aware of, so these may extend the life of your enterprise solution.
- Review and improve your business processes, redesign your organisational structure or consolidate your supply chain.
- Acquire 3rd party advanced “point solutions” that can be integrated to your current ERP to extend the functionality of your existing system.
- Conduct a Training Needs Assessment and if required, provide additional training for new and existing staff based on their specific needs and roles.
All of these options may offer considerable cost savings to the business rather than a full ERP replacement.
Another reason that upgrading may be less expensive is because your employees are familiar with the current solution, so you will not have to go through a major change management and training exercise.
2. Go to the market for a new ERP Solution
If you do decide to go to market to assess alternative ERP solutions, consider including your current ERP Vendor as a potential option. This will provide you with a view of the latest capabilities and options as well as more negotiating leverage.
Other Vendors competing for your business will understand the potential cost savings of you staying with your incumbent Vendor, so will be more likely to present creative solutions and competitive proposals.
Whichever way you decide to go, your ERP Solution must also be able to support and align with your future business strategies. In many cases, new ERP software alone will not solve your business problems. If your business processes are flawed, even the most advanced enterprise solution isn’t going to help.
Regardless of which direction, you choose to go in, it is important to be able to clearly articulate why you want to change to a new ERP solution. Prepare a cost model comparing the options and identify the pros and cons of each.
Consider a new ERP as an option, not a mandate. Then, you will be motivated to outline the specific benefits you hope to gain, and this will form the basis of a compelling business case for moving forward with your decision. If the business case is unclear; consider whether you may need a more formalised, and structured evaluation approach.