ERP Profitability Trumps Status Quo

Breaking Up is Hard to Do… but Leaving your Legacy ERP can be Transformative.

Change is hard, and that can include leaving your legacy business software, even when it’s not helping your business as much as you need, and moving to a new, untried ERP system. While resistance to change is commonplace (everyone feels more comfortable with what they know well), in the enterprise software market, ERP profitability trumps all. When a new ERP system can result in cost reductions and substantial improvements in workforce productivity and business process efficiencies, it’s time to let the status quo go!

Red Flags

But it has to be the right ERP system, and they are definitely not all the same, so choose carefully. Do your homework, and watch out for these danger signs:

Red Flag #1: Vendor Can’t Get Back to You Quickly: There is never a reason an ERP vendor shouldn’t get back to you either for information or to give a software demo. Any delay likely indicates that they have problems meeting the market demand, which is growing as more and more companies enter the market for an ERP system. Vendor response time is a key indicator of how adequately resourced they are – in R&D and implementation and support staffing. Ask each ERP vendor what has been their general hiring trend in the past year or two, and their investment in research and product development.

Red Flag #2: Outdated Technology: For example, as great as IBM AS-400 systems were for years, they are not as user-friendly or as intuitive as today’s generation of workers needs and wants. You’ll want a software system built on a familiar technology with a long term product roadmap and deep R&D investment to ensure that your business stays current in the years to come.

Red Flag #3: Custom Programming: Watch out for ERP vendors throwing out phrases like “customization,” “modifications,” and “specialized features.” These won’t come easily and they won’t be cheap! Custom programming means a whole lot of code that cannot be easily upgraded in the future, and leaves you vulnerable should that vendor retire its software or go out of business. Similarly, beware any ERP vendor that tells you they want to “use what you already have and extend applications” – that doesn’t work anymore with today’s fast technology cycles. Look instead to invest in modern technology that has the ability to scale out long-term as your business needs change in years to come.

Red Flag #4: Irrelevant Customer References: How many customer references will the ERP vendor give you to contact that are in the same industry as you? If you’re in the market for food processing ERP software, your needs will differ substantially from other process manufacturers, so a chemical company reference isn’t helpful. Also, is the vendor showcasing customers who have been using the same business software system for 10, 15 or more years? While vendor loyalty is nice, falling behind on the latest technology is not.

Heather Angus-Lee is a writer with JustFoodERP, an IndustryBuilt Software company, which provides ERP software for food processors and distributors across North America. She can be reached at heather.angus-lee@justfooderp.com.