10 signals that indicate your current system is just not enough anymore
Never change a running system, they say. But when your ERP system slowly starts to prevent your company from making progress, it's time to question it. There are a number of unmistakable signs that indicate it's time to think about moving on. Read our article to find out which signs these are.
Have you followed the Olympic Games last summer? None of the runners would have entered the race with weights around their wrists and ankles, not to mention hope for winning a medal with such a handicap. Things are a bit different in the international manufacturing business: many companies enter into competition with an ERP software that blocks their development instead of boosting it.
But why? Maybe because it's not possible to directly measure loss of performance in a business as opposed to top athletics. The decline is rather subtle here. However, there are clear indicators when it comes to business software. To find out if your system doesn't fulfill the requirements of your modern business anymore, ask yourself these questions:
- Do you have to print out data in one system and manually enter it in another one?
Many companies still have various process steps where information on a paper document or printed document is typed into another software. Typical examples of this are stock receiving, data entries in production, creation of dispatch labels and the management of addresses, part master data and cost centers. Not only do these media disruptions slow down processing times, they also lead to inconsistencies that might cause confusion and errors.
- Do your employees frequently ask the same questions in the same process steps?
If your purchasing team often has to wait for replies from the engineers, or sales have to keep asking when a certain product can be delivered, then you have to watch out. Frequently asked questions are a clear sign that your employees don't have access to necessary information.
- How much do you still communicate with your customers and suppliers via fax, mail, e-mail or phone?
A modern, digitalized supply chain has data flows along all IT systems involved. If you still do a lot of manual work here, you are taking the risk of increased process costs. A pole position in the international competition might be beyond your reach then.
- Can you use your ERP masks effortlessly on mobile devices?
According to a Trovarit survey, the average age of an ERP installation was 11.3 years in 2020. If a company is using a rather old system or release, chances are that it is not supported on mobile devices. Companies are blowing many chances here, not only in sales and service, but also with respect to being attractive as an employer. Just think about working in home office.
- Do you receive the reports you need to make your decisions?
Some systems store many data, but are quite rigid. This means, the data can't be used properly or as quickly as required. Modern ERP systems, however, offer comprehensive and flexible reporting tools and business intelligence features.
- Does your current ERP system support all your workflows?
In the past, a lot of effort and money was put into customizing business software. Meanwhile, the requirements have changed. And what about the ERP system? If the latest release cannot be customized due to missing functions or the costs for such customizing are as high as the costs for all-new software, it's about time to take some action.
- How easy is it to make some minor adjustments by yourself?
Agile processes are nothing exceptional anymore these days. On the contrary: they are a prerequisite for keeping pace with ever present changes. Sometimes, a small amendment makes all the difference: a new field here, an adjustment to the workflow there, another mask for plant data collection... and that's it! Your ERP provider should enable you to flexibly react to changed requirements on your own. After all, the pandemic has taught us at least one thing: requirements from customers or authorities sometimes change faster than we would like. The availability of a very busy consultant must not stand in the way of this.
- Can you keep up with big global players?
Internationally successful companies don't just have cutting-edge technology. They usually know very well how to establish their organization across various countries and continents, thereby gaining locational advantages. The key to their success, and that is your success, lies in consistent intercompany processes.
- How fit for the future is your ERP solution?
You don't need a crystal ball to predict the future of your ERP system. You can derive a lot from the developments in the market and the action taken by your competitors. For instance, it's not a good sign if your ERP system is an impediment to customer web portals and e-commerce. Trending features in other industries might also provide some considerable impetus for your development. Your ERP system should be prepared for all of this.
- How strongly does your provider orient the development toward new technologies?
Even though you might not have a lot to do with sensor technology, distributed databases or self-learning algorithms yet, things might be looking quite different in one or two years. Your ERP system must be technically adept for this. It is therefore essential that your provider continuously develops the system.
Researchers are urging companies to get started now!
|Professor Dr. Axel Winkelmann
Tenured Professor for Business Economics and Informatics at the University of Würzburg
The clock is ticking for companies whose ERP systems have seen better days. This is confirmed by Professor Dr. Axel Winkelmann, who holds the chair for Business Economics and Informatics at the University of Würzburg. The wheat was currently being separated from the chaff, said the scientist in the proALPHA Podcast. A few companies had already integrated their corporate data pretty well, but the majority of companies were still working with isolated solutions or even analogously with folders. "We can't keep going with small and isolated solutions anymore. We need the bigger picture. We need the big ERP system, the foundation for all corporate data, that is capable of pooling all these data for the purpose of automation, rationalization and increased efficiency," Winkelmann demands. Only then can it boost your business.