We get a lot of questions from customers who wonder when they should upgrade their ERP system. We decided to put together this guide based on our experiences, so you can determine if your ERP system needs an upgrade!
Based on over 200+ NetSuite implementations, we've identified the top three most common reasons our customers upgrade to NetSuite.
3 Signs It's Time to Upgrade Your ERP System
1. Lack of Functionality
Many ERP systems lack core business functionalities.
For example, in manufacturing or wholesale distribution industries, legacy ERP systems have problems properly tracking inventory, revenue, and manufacturing requirements.
We also see a lot of businesses in the software industry managing data with Excel, which — aside from being complex and prone to errors — can cause huge data discrepancies between departments. Plus, sending around various Excel spreadsheets doesn't exactly lend itself to making strategic, data-driven decisions based on real-time data.
Dated ERP systems create disparate project management and accounting systems. There's a disconnect between data, so it's not always easy to identify actionable metrics or results.
NetSuite's Advanced Functionalities
NetSuite is a powerful ERP system. While it's fully customizable to fit your needs, it contains a lot of functionalities out-of-the-box that most other ERP systems don't have at all. Because of NetSuite's robust capabilities, the highest ROI customers see when switching to NetSuite is improved profit margins. All of these features allow you to grow your business without growing your headcount to support it.
2. Current ERP System Doesn't Support Acquisition Strategy
In many cases where we've worked with businesses acquiring a new company, their current system is unable to support this acquisition.
This leaves each company's dataset in two separate ERP systems, with no viable way to combine them. Sometimes, the company has to purchase a second instance of their existing system or they have to deal with consolidations in Excel. This means they might not even see consolidated data until end-of-the-month reports.
What we've heard across our customer base is that they conduct acquisitions to take advantage of economies of scale.
How NetSuite Supports Acquisitions
NetSuite can handle intercompany transactions and reporting. It also allows you to add unlimited subsidiaries.
So we can have multiple legal entities within the same NetSuite system. This allows you to save money, create standardized processes, eliminate redundant processes, and build a shared service approach.
The screenshot below shows an example of NetSuite's subsidiary navigator.
3. Disparate Systems Are Causing an IT Mess
We've seen a lot of customers in ERP systems that cause a huge IT mess. Their systems will be disconnected, causing multiple different datasets for the same exact team. As you could imagine, this leads to issues tracking down the source of truth when running reports and creates a huge mess of data.
If you're relying heavily on IT for accounting or operational needs, it's probably time to upgrade your ERP system.
NetSuite Keeps Everything in One Platform
NetSuite keeps everything in one platform so you can handle every part of the business from one place. Aside from being an ERP, NetSuite is also a CRM, MRP, marketing, and accounting software.
Keeping everything in one system takes advantage of efficiency. This limits IT involvement and reduces infrastructure costs since the software is entirely cloud-based and you won't have to pay to host servers on-site.
ERP System FAQs
How Long Does it Take to Upgrade an ERP System?
On average, upgrading to NetSuite from another ERP system takes about four months.
This timeline could change if you need customizations that require NetSuite development work. To keep the timeline as short as possible, it's best to know exactly what you need. If you end up needing customizations, we offer a suite of pre-built NetSuite bundles that are quick and easy to add on!
How Long Does it Take to See ROI After Switching to NetSuite?
Most customers realize ROI within the first 12 months of switching to NetSuite.
Depending on the severity of issues you experienced with your previous ERP system, you could see ROI sooner.
How Long Does an ERP System Last?
The length an ERP system lasts depends on which system you have.
ERP systems that have to be updated manually can become outdated within 5-10 years. However, NetSuite automatically updates and is cloud-based software, meaning updates can be deployed at any time. This helps keep NetSuite updated, so you won't have to worry about switching from outdated software in five or so years.
Upgrade Your ERP System Today!
We've helped our customers with all the above scenarios and more. Whether you have a similar situation or something completely different, we can help.
Our experienced in-house NetSuite development team enables us to quickly and effectively implement NetSuite for any scenario. Contact us today for a free consultation!