Changing ERP Systems: Part Three – Reasons to Change

There is an English proverb that states “the grass is always greener on the other side”, and it is wise to keep that proverb in mind when contemplating changing ERP systems. Anyone who has been through one ERP implementation knows two things: (1) No ERP package is a panacea for every business problem and (2) sometimes it is better to stick with the devil you know rather than gamble on the one you don’t. Bottom line, choosing to replace an ERP system should be so necessary and unarguable that there is no “hard decision” to be made. If the decision is difficult or close, don’t do it. Listed below are some examples of compelling reasons you would choose to change your ERP system:

1. You have been acquired, or are part of a merger. Assuming the new entity wants one seamless organization, standardizing on a common ERP platform should be close to number one priority. Without common business software, the two organizations will continue to behave as two separate companies, no matter what the legal documents might say.

2. The organization has significantly changed its strategic direction, and the current ERP package is not strong in the new direction. Perhaps a manufacturing concern has decided to become an importer/distributor. In a case like this, changing to an ERP package that better supports that business model would make sense.

3. Accumulated frustration with the current ERP vendor has driven you to seek a divorce. I use the term divorce consciously; the relationship between an ERP vendor and a user is like a marriage, and just like marriage, both parties are better off if the relationship can be made to work. However, if one party does not keep its vows – it raises maintenance fees beyond reason; it doesn’t deliver needed fixes; it doesn’t come through with timely technical support when needed – then eventually enough animosity builds up that the relationship cannot be salvaged. Do not be quick to pull the trigger on divorce; as in real life it is painful and expensive. However, when the last vestige of trust is gone, there is no other choice.

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4. Your ERP vendor has gone out of business, stopped supporting your software, or ceased development. Since regular and systematic product upgrades are typically cited as one of the big benefits of ERP, the absence of the same represents a competitive liability, and you need to get linked back up with a winner, as soon as possible.

One final condition to evaluate along with any of these type of criteria is “how much customization has been done over the course of product ownership, and how much will have to be redone with the new ERP software?” Since customization can only be justified if there is tangible business value, by definition, all lost customization is lost business value if the new software cannot adequately perform that function.

Changing ERP systems. Do it if you need to, but don’t take it lightly.