When does your ERP system become outdated?

Some businesses are working with a 20-year-old ERP with apparently little or no problem. In IT terms, we call these ‘dinosaurs’. For other companies, a solution may prove to be inadequate after only five years. And in many cases, the best-before date may not be immediately obvious. Just because every department in your organization swears by a system they know inside out doesn’t mean that it should stay the same. But how do you know when it’s time for a change? In this article, we discuss 4 essential questions that can help you assess your current ERP system.

Actually, the term ‘outdated’ in the title above is a rather flexible concept. After all, what is important here? Is your current system costing you a lot of money because you need constant support and adjustments to meet your changing environment? Or do you want to make your organization more agile and let your ERP system play a key role in that? Put simply, does your current solution still support the growth ambitions for your business?

Assess your ERP system with these 4 essential questions:

To what extent does your current ERP system meet your needs? Using the questions below, you can evaluate.

1. What's the cost of optimizing your ERP-system?

With an ERP that has been around for a while, the costs for corrective support, i.e. solving bugs, will be rather low. Optimization, however, will be a lot more expensive. Examples of optimization are improvement projects, customization in response to changing conditions or interfaces that allow your ERP system to interact with other systems. If these costs keep rising, it may be a good idea to talk to an ERP partner. Have you stopped optimizing altogether? Keep in mind that doing nothing has its own high cost.

Modern applications or platforms, on the other hand, can support a large number of new developments or needs by default, or provide regular updates to respond to changes in legislation and practices. This usually makes optimization much more efficient.

2. Does the outdated technology pose a potential risk for the future?

If your ERP was built on outdated technology, it may cause you problems in the future. What happens if your application manager, who has mastered the ins and outs of your old system, retires next year or suddenly leaves the company? Technology is advancing at a rapid pace, and finding new talent who are able to provide support for legacy systems will not be easy.

3. Does your ERP system connect properly with other systems?

Your ERP may be working hard for you, but exactly how much time is being spent on other systems, such as CRM or data analysis? Are all these solutions integrated with one another? If so, how much does it cost to maintain them all, and how long will they last? If the systems are not integrated, it is possible that different data streams exist side by side, yet do not match. Or employees in different departments could be doing the same work, but in different ways.

4. What are the capabilities of your ERP system?

Your ERP system may still be doing a good job, but its users would probably benefit from working with a more modern alternative. A new system will probably make their job easier, freeing up time for them to do other important things. They cannot miss what they do not know. This RFP-template for ERP provides you with some guidance on finding out what is possible with the help of a comprehensive questionnaire.

Internal - to - external analysis

If you have doubts about the sustainability of your current ERP system, you are best to start with an internal analysis. Ask yourself these questions: where, if it does, does your current system fail? What big changes will your organization be facing tomorrow? And can new technology help to prepare you for these changes? Not all questions can be answered unequivocally, but a quick look at where you are now may help in determining where improvements may be needed for your ERP that will translate into value in the future.

An experienced IT provider can certainly help you with that. A reliable and trusted partner would not necessarily impose a new ERP suite, but would look at your business pains and propose an up-to-date solution accordingly – be it a single app, an integrated platform or even something in between.

Time to get started with ERP?

Want to learn more about ERP processes? Then get inspired by our e-book ERP: From Strategy to Going Live. In this guide you will discover how to map your business processes, you can use a calculator to estimate how many hours/people need to be made available, we cover our RFP checklist for ERP and offer advice on preparing your ERP project and selection process. Then we share some real-life examples of companies that have successfully implemented ERP and conclude with the best service approach after implementation.

Curious about how we tackle ERP challenges at Cegeka? And would you like to discuss  what we can do for you? Contact us.