Top 7 Reasons Your Company Should Consider a New ERP System
Changing business software platforms is never easy, especially when it's a critical component like your ERP system. However, there come times when it may be necessary to go through the effort of switching as there’s no one-size-fits-all solution.
Here are seven business situations in which it makes sense for your business to consider a switch to a different ERP:
1. Your company is being sold or is gearing up for sale.
You’ll probably have a long checklist of things to do before selling your company. Some items on that list might include determining the fair market value and building a team to provide tax, legal, and business advice.
A big part will be getting your finances in order. This process includes ensuring your ERP has organized and clean financial reports that provide operating expenses, cost of goods, payroll, revenue, and more. You'll also want to show consistent net profits for several years.
Depending on how you handle your bookkeeping, you may need functionality not present in your existing ERP system. You may also require a lot of manual work to get everything in order, but a more advanced system could reduce the number of hours (and associated costs) needed thanks to automation and additional functionality.
2. Your company is changing direction.
When your company changes direction, this often requires changing goals and objectives.
Executing a pivot is likely to require developing new processes and establishing new systems. For example, you may seek to increase employee productivity by facilitating remote work. As part of implementing supportive new processes, you may find your existing ERP system ineffective.
3. You have too many manual processes.
Having too many manual processes leaves too much room for human error. Using a modern solution with permission-based systems can help reduce the risk of manual errors.
Using the right technology can improve efficiency. For example, if your team spends significant time on manual data entry, you've likely outgrown your existing system. Manual work can result in substantial errors such as incomplete or inaccurate data. Failure to catch and correct such mistakes can lead to poor business decisions and adverse outcomes.
4. You have multiple sources of truth.
Some legacy systems cannot integrate easily with other systems, resulting in an increase in manual processes or a reliance on multiple systems as a source of truth for different information.
Using an ERP based in the cloud can make it easier and faster to do data integration across multiple systems, making it possible to have a single source of truth that drives your business decisions.
5. You’re ready to scale your business.
When you have a small operation, you can't rely on the same technology as your business grows. The more your company grows, the greater your need to update your systems.
Cloud-based ERP systems like Oracle NetSuite can be very conducive for integrating into e-commerce platforms such as Shopify once you have a higher volume of transactions. It will also incorporate on the B2B side with software like EDI.
6. You have limited visibility into your business.
Knowing what's happening within your organization can become a challenge as your business grows. If you rely on spreadsheets, for example, it can be challenging to try and find the information you need and rely on its integrity – and the amount of data will only keep growing as you scale.
With an ERP system that better meets your business needs, you'll be able to access information quickly across your entire organization. This change can include accurate, real-time data that you can use to make better decisions.
7. Your employees can’t work from anywhere.
If your employees work from one physical location because they need access to your database, you may encounter productivity and employee retention problems. Staff may want (and often need) the ability to work remotely. If your ERP system prevents practical remote work, it’s time to upgrade.
What to Look for When Considering a New ERP
Your ERP system needs to be able to keep up with your company's growth. You also need to be able to save time by doing less manual entry. You must have streamlined, automated business processes. Once you do this, you can reallocate staff to more productive work.
Keep in mind that switching to a new ERP system is a significant project that requires substantial subject matter expertise to ensure the implementation meets your business' needs. Check out our new guide, Choosing an ERP for Your Growing Business, to learn about what to look for in an ERP partner and how to weigh your options.