A good ERP system 
can be the lifeblood of your company. And a bad one can be a drain. There comes a time for every business when the cost of maintaining legacy systems becomes a burden; support from the software provider ends; or your business is spending a lot of effort trying to develop customised fixes or workarounds to resolve issues and get visibility across disparate systems.

Yet it appears many businesses are very patient. In fact, recent Forrester research shows that approximately half of ERP customers’ existing systems are two versions behind the current release, which may be four years old or more.

There are many drivers and reasons for ERP change within a business,
 all of which may be different for each stakeholder in the company. In fact, it’s often not just one reason that gets a project across the line, but a combination of many.

In this blog post, we’ll explore the compounding reasons that propel organisations to seek change.

Making the erp transition guide

The key reasons for changing an ERP system

Small inefficiencies are adding up
Technology moves fast and the loss of efficiency in processing is a hidden cost. An outdated system, or a collection of different software packages, will force you to focus your resources on maintenance instead of allowing you to channel that money and energy on solving real business problems.

Business needs are outgrowing system capability
If increasing maintenance costs and limited-user license fees are adding up as your team’s headcount grows, you may be dealing with a system that doesn’t scale well. Your enterprise systems should support and streamline your team’s growth, not hinder it or generate more work.

Customer needs aren’t being met
Customers, suppliers, and partners expect direct access to billing, shipping, and inventory data. They don’t want to call someone to get this information and you don’t want to generate unnecessary customer service calls.

Workplace dynamics are changing
If most of your workforce is working remotely or on-the-go, your old system may not have the mobility functionality to keep up. And if your company encountered a sudden increase in demand or an opportunity to expand, would your ERP system be able to scale?

You don’t have access to real-time information
If you have to dig for up-to-date information, critical decision-making is slowed and the capacity to problem-solve effectively is impaired. Spreadsheets are a favourite way for many businesses to carry out analysis, but how can you possibly get a real time view or be fully-confident in your data if everything must be manually consolidated?

Your ERP isn’t keeping up with changing regulations
Tax rules and other industry compliance regulations change frequently. For many businesses, compliance demands are constantly shifting and legacy ERP solutions simply weren’t built for agile business movements.

Total Cost of Ownership (TCO) is blowing out
Chances are your legacy systems give you a picture of the hard costs, such as software license fees, but you lack visibility of the soft costs which are not readily quantifiable – for example, the cost to the organisation of productivity and time.

So, why do so many companies delay the decision to change ERP Systems?

In our experience, working with NZ companies across different sectors and industries, despite all the compelling drivers and reasons for change outlined above, there’s one key ingredient which signals the ‘right time’ for a business to start down the ERP implementation path
stakeholder goal alignment.

Getting the project across the line involves many players company-wide and each department will have their own motivations and reasons for selecting a certain solution, or blocking change entirely. Ultimately, it’s stakeholder alignment that determines the timing and requirements of a new ERP system – not the pain points of the legacy system or the individual motivations of key stakeholders. 

More often than not, a lack of stakeholder buy-in is the reason projects are derailed.

Download our full guide to get more in-depth insights, advice and strategies to help you achieve stakeholder alignment in your business, so that you can experience the benefits of a modern, efficient ERP backbone for success.

[1] ERP Customers Demand Better Flexibility, Cost Transparency, and Mobility, Forrester Research.