The life cycle of an ERP in the company reaches ten years, even fifteen in some cases. However, as long-lasting as it is, there comes a time when ERP has had its day. How do you know if it is time to invest in a new solution, or if there is still interest in running an ERP that has several years of service? There are several indicators to follow to know if an ERP is no longer suitable and must be replaced by a new generation.
The
industrial company grows, its activity develops and diversifies: in ten years,
many changes have taken place in its activity, its processes, its offer, its
constraints to remain competitive. It is logical that its historical ERP, even
well maintained and supplemented with functionalities developed during its life
cycle, ends up no longer meeting the needs.
An aging
ERP may lack flexibility, fluidity and responsiveness. It is difficult to adapt
to new processes and becomes too complicated to use, often from a not very
ergonomic interface. He can also show signs of fatigue, with slow processing
and too long response times. Finally, technology evolves quickly and the older
a solution, the more difficult it is to integrate new applications.
To identify more precisely the need
to change ERP, here are the signs that do not lie.
Soaring ERP-related costs
Maintenance
is certainly a regular cost linked to an ERP, but the amount can soar with an
aging solution. And this for two main reasons. On the one hand, if the
publisher has not ensured a high level of maintenance, the shortcomings are
increasingly felt over time and the only solution remains even more
maintenance. On the other hand, a legacy ERP is likely to rely on hardware that
is also aging and prone to breakdowns. Hence more maintenance interventions to
avoid any interruption and, worse, data loss.
Other
expenses with an ERP that is out of breath: the lack of functionalities for new
uses, which implies specific developments to fill the gaps. However, these
developments are expensive. They are justified as long as the functionalities
of the ERP cover almost all the functional field required as standard, with a
few optimizations. On the other hand, when too many specific developments are
required, it is better to stop the costs and invest in a new ERP.
On the trail of new technologies
Web
interface, Business Intelligence, Cloud, mobility, e-commerce… so many
technologies and applications that were not yet widespread when the oldest ERPs
were designed. However, the technologies and new uses enabled by the latest
generation ERP solutions are sources of efficiency and savings, and customers
are asking for them.
This is
why publishers make their ERPs viable from version to version to allow the
solution to remain compatible with new technologies for as long as possible.
When this is not the case, or an ERP is no longer maintained, users lose many
opportunities. For example, an ERP that cannot work with or in the cloud robs
the business of valuable mobility. It is then impossible for users to consult
remote ERP data and indicators in real time, in particular at the client's. Or,
when an ERP does not integrate Business Intelligence, so many operational and
optimization indicators are missing.
A penalizing lack of scalability
In
addition to integrating new technologies, an ERP must also have enough
scalability to adapt the functional field to new needs – which do not fail to
appear when the company evolves over time.
A legacy
ERP does not always allow the implementation of new processes, because it is not
possible to enrich it with the corresponding functionalities. This lack of
scalability is a real obstacle for the company. To extend the example of
Business Intelligence, the impossibility of integrating a module dedicated to
the ERP requires the equipment of a third-party solution, with a risk of
interfacing problem with the ERP of another generation.
The
difficulty in obtaining new functionalities can also come from the fact that
the publisher of the solution no longer offers updates. This is the sign of an
outdated solution, on which even its publisher no longer relies.
An ERP less and less useful to
users
The
primary purpose of an ERP is to optimize operations and deliver visibility and
activity indicators that are useful for decision-making. When the processes and
associated data processing are oversized for the capabilities of ERP, users do
not find the expected benefits.
Notably,
in terms of overall performance, ERP no longer helps decision-makers improve
customer service, sales, or save money. From stocks to the entire production
chain, flows are not properly managed. Conflicts on the shop floor arise, which
the operational staff cannot anticipate. Hence, also, problems of
unavailability of products that put salespeople in front of dissatisfied customers…
the list of all the shortcomings suffered by staff due to an obsolete ERP is
long!
When the
ERP no longer fulfills its missions correctly, users tend to resort to the D
system and develop their own tools and spreadsheets. But unlike ERP, these
tools do not interconnect their data and do not perform the advanced
calculations and analyzes of an ERP worthy of the name. The company misses
multiple optimizations and savings, and the solution lies in a new ERP.
Obstacles to interacting with the
ecosystem
Any
company operates in interaction with many partners, resellers, suppliers. This
ecosystem now benefits from technologies that digitize flows and data to work
together in a connected way.
In this
context, the ERP must contribute to establishing win/win relationships with the
ecosystem and support the development of the structure. This implies being able
to provide access to the ERP to certain interlocutors, and to exchange data
with them, from system to system.
When an
ERP was not designed for this interconnection, and cannot evolve to adapt, the
company can miss out on business and development opportunities. Its ERP also no
longer allows it to remain competitive, because it slows down the company's
responsiveness and its ability to respond to its customers. In this case, the
ERP loses all its interest and it is time to move to a next-generation
solution.
In
conclusion, an ERP is above all a solution that facilitates operations,
performance and customer satisfaction. From the moment an aging ERP hinders the
development of the company, it must be replaced.
Investing
in a new ERP can only bring a satisfactory ROI by eliminating the pockets of
expenses of an outdated solution, and by generating new savings. This is
particularly the case in terms of maintenance costs when the company opts for
an ERP in service mode (SaaS) in the Cloud, where many ownership costs
disappear. There is therefore a real interest in taking the plunge.