Is it time for a new ERP system?

That question plagues many manufacturing enterprises as their legacy ERP systems continue to chug along. By definition, your ERP system is your financial and operational backbone – supporting all areas of your business and value chain. Replacing it would appear to be a difficult and intensive process, but done right, it can open unlimited business opportunities.

Companies decide to replace their ERP systems for a variety of reasons. At the most fundamental level, the question is whether your current system supports or constrains your ability to execute
business strategies that will make your company successful and establish it as an industry leader. These systems typically automate only a single business function and not an entire, cross-functional business process; they demand manual, labor-intensive processes, such as rekeying data into separate systems.

Many legacy systems are also inflexible, as they don’t permit organizations to change their business processes to adapt to changing business requirements, nor do they provide visibility across the organization—let alone across the extended supply chain. In today’s connected world, many legacy systems struggle to provide the deployment and device flexibility demanded by business users. It may be time to consider a new ERP system if you answer in the affirmative to:

  • Is your organization growing exponentially and in need of a system to keep up with yourfuture growth expectations?
  • Are you planning on adding new businesses by growth or acquisition?
  • Are you subject to GAAP, international financial reporting standards (IFRS), Sarbanes-Oxley, or any other national or international financial oversight?
  • Do you need financial transparency across all of your business units or is your organization still using spreadsheets to manage its financial health?
  • Are you using a highly customized system that does not allow the ability to upgrade to new, more efficient technology platforms?
  • Are all your users, however infrequent, able to interact with the ERP regardless of device and without requiring weeks of up-front training?

Why it might be time for a new ERP system.

First and foremost, an enterprise needs to have a finger on the financial pulse of the company, and as the pace of business continues to accelerate, the organization must move rapidly with precision and agility, reducing reaction time and optimizing financial performance. You can’t afford to miss an opportunity or delay a necessary course adjustment. That means that everyone in your enterprise who impacts the financial results must know how the business is performing on a daily basis. In a global business environment, forward thinking and planning is vital. Critical financial metrics can’t be permitted to get lost in the information morass.

Read Also: What is Cloud-based ERP Software?

Many businesses are finding that it’s no longer enough to respond to financial trends uncovered by complex business intelligence tools, all too often removed from the point of decision and managed and used by a limited few. Today, decisions that affect the overall performance of the business are being made top down and bottom up on a daily basis. In response, a new breed of enterprise business application has emerged that includes operational tools that measure performance as business happens—managing workflows, and alerting people as they work. Today’s information workers want decision support in real time, and they want it deployed to the devices their users already know and use, day in and day out.

Enterprise performance management (EPM) solutions offer end-to-end capabilities that remove the barriers to better business insight through a combination of intuitive user experiences, user-driven key performance indicators (KPIs), and pre-packaged analytics that have real meaning to the business.

Today’s enterprise-level financial systems should also come standard with embedded executive dashboards and graphical KPIs designed to give executives and line-of-business managers alike
the strategic financial data required to make critical short-and long-term decisions. Strategic use of these resources allows you to manage by exception, as opposed to micromanaging the
increasing number of financial variables and demands being placed on your company. Some examples of standard financial dashboards and KPIs that you should include in your evaluation of
vendors include calculation of days sales outstanding (DSO) and days payable outstanding (DPO) to determine your organization’s cash flow position, supplier performance metrics, sales order
backlog and scheduled shipments, and so on. Individual KPIs and combinations thereof (typically known as scorecards) bring together high-level visualization of business processes and business events, so that you can monitor your organization and carry out benchmarking or performance-based management. EPM delivers this level of business insight via a solid and highly productive foundation to make it easier to raise business performance to the highest levels.

Read Also: Is Cloud ERP Right for Your Manufacturing Growth – Right Now?

Additionally, with the increase in worldwide compliance regulations, the need for corporate financial visibility has become paramount for any size organization—public, private, or non-profit. Regulatory bodies and audit firms are all advocating the need for improved financial management and visibility. Many companies today have to resort to numerous information sources to support this visibility, from legacy software programs created to help run specific departments, to other packaged applications that may have been purchased and implemented across the company over time. Combining disparate data sources and reconciling disparate departments is a huge undertaking. While departmental spreadsheets and legacy data systems may be providing an adequate solution today, as the need for centralized data and visibility increases, spreadsheets and homegrown systems will no longer be a viable solution to run a business.

Effective governance, risk, and compliance (GRC) initiatives not only help companies and their employees stay compliant, but also provide a framework for defining business processes, and the
risk appetite across the entire organization. Auditors, regulatory bodies, customers, and other stakeholders have expectations regarding the protection of corporate information against piracy,
fraud, and sabotage concerns. ERP systems effectively control the majority of the information that could potentially be at risk.

Are you ready for a new ERP solution? We can help!