Why Delaying An ERP Decision Is A Mistake?

Today’s leading manufacturers and service providers are diving into technologies to help stay out in front—advanced robotics, 3D printing, Manufacturing 4.0, the cloud, big data, the Internet of Things, and mobile technologies, just to name a few.

Incorporating new methods for doing business is always challenging—but it’s downright grueling without the enterprise resource planning (ERP) platform that competitors are taking advantage of. To put it in medical terms, ERP is the backbone organizations need to embrace any or all of the hot technologies listed above.

Fact—58 percent of “best-in-class, midmarket” companies not only use an ERP system, they’re currently updated to the latest version of their software, according to a recent Aberdeen Group study.1

Aberdeen found companies using the most recent version of their ERP performed better in:

  • Days sale outstanding (DSO)
  • Complete and on-time delivery
  • Internal schedule compliance
  • Percentage of accurate financial reports
  • Percentage of time that information is received during the “decision window”
  • Inventory accuracy
  • Customer satisfaction

 

“Those on the latest version of ERP are more likely to have access…from mobile devices, embedded business analytics, eCommerce support, and social business capabilities,” the report said. For example, 56 percent of users can access current ERPs via their mobile devices. Only 20 percent of users on earlier versions of ERPs have mobile access.

 

ERP fits all sizes well

Most people hear 100 to 250 employees and they’re most likely to think “Sounds like a small company.” That may be, but keep in mind that one person’s small company equates to a midmarket player in Aberdeen’s and other analysts’ eyes.

Sifting through data, working on the same programs, and sharing up-to-the-minute information across teams via a top-tier ERP is a godsend to many, many small businesses. We know this for a fact—we hear from these businesses all the time.

Despite the obvious benefits of ERP for start-ups to multinational corporations, size seems to be the biggest deterrent to any company taking the initial plunge with ERP. Aberdeen noted: “The number one reason that many organizations refrain from implementing ERP is that they consider themselves ‘too small.’”

As we get to know prospective clients, what we typically discover is that focusing on their size (in essence, their current budgets) diverts their attention away from an even more precious resource—their time.

Outdated IT tools and platforms lead to departments within an organization acting as silos where sharing of data is difficultand and at times discouraged, instead of working as teams that share, communicate, and collaborate.

Typical “time-wasters” we see in businesses yearning to grow but unable to do so because their IT systems and capabilities are outdated include:

  • Redundant and/or inaccurate data
  • Organizational teams working on different programs
  • No clear picture of day-to-day inventory
  • Slow and clunky system performance
  • Inability to track business processes
  • Difficulty measuring customer service results
  • Being able to remedy mistakes before customers complain

 

Businesses often report challenges like these:

“Employees spend too much time on tasks that could easily be automated or streamlined.”

“We have a lot of different software tools and processes, but they’re not connected to each other.”

“I can’t access essential business data and information when offsite.”

None of these experiences can change until the organization makes the change. A company’s size is irrelevant—it comes down to an organization’s determination to make a change and embrace a better way of doing business.

Once again, the benefits of implementing an ERP before it’s too late go beyond improving the bottom line. Professionals we work with express relief at their newfound ability to work faster, smarter, and more easily than ever.

 

Sticking with the system they know and like

We’ve taken a glimpse at who’s not jumping into the ERP pool and the reasons why. Among organizations that utilize an ERP system, the picture is a bit different.

While some are running full speed ahead with the latest ERP, surveys show businesses stick with their ERP for up to seven years, on average, and sometimes longer. While this says a great deal about the quality and reliability of ERP programs, the obvious downsides are:

  • The inevitable clunkiness of using older software
  • The lack of up-to-date security protections from viruses and hackers

 

Research tells us a key reason ERP users are years behind in updating is lack of support from their current vendor. In other words, part of the reason companies put off improving their situation is because the vendors they depend on and believed in at some point don’t support the previous ERP anymore.

Bottom line—these vendors aren’t always stepping up to the plate. Vendors can and should make upgrades as painless for the customer as possible.

We work with clients whose needs change a couple of years or more into using an ERP solution. This is not a problem. These businesses can choose and change what they use with our support through every step of the way.

As for security risks, the dangers are blatantly obvious. Consider all the valuable data that’s produced and shared between customer service, human resources, finance, IT, warehouses, and manufacturing. A security breach can put a company in violation of a dozen or more federal and state laws and regulations if just one customers’ data is breached, with lawsuits always a possibility.

Older software systems are often more vulnerable to attacks. Malicious hackers can more easily find their way into cracks in older programs versus newer, more robust programs.

Protecting proprietary information and your valued customers’ information requires staying up-to-date. For CFOs and IT chiefs who aren’t swayed by the performance pluses, a gentle reminder about security may be what it takes to tip the scales in favor of an ERP implementation or upgrade.

 

What it takes to win today

As a rule, tech solution vendors should be frank from the outset about how much time and money a brand-new ERP initiative or an upgrade of existing functionalities will cost. The leading tech vendors are happy to do it for their customers, from the start of the relationship, through all of the significant steps along the way—and they’re available to step in quickly when problems arise.

A few years ago, ERP deployments could take up to 18 months. Today, that is not the typical case for ERP implementations, which are commonly completed in much less time. At Century, we strive to structure implementations that minimize customer disruptions, though customers need to understand the commitment needed for a successful implementation. Businesses can make needed changes on their own timelines. We strive to keep the learning curve narrow by scheduling improvements in small steps rather than leaps—and we seek to reduce those dreaded workarounds by adopting releases that fix bugs.

The new age ERP is designed to offer easy-to-use automatic upgrade capabilities, greatly simplifying the process. Our implementation philosophy is designed to reduce the time and stress over ERP upgrades with this newer, simpler process in place.

Customers see should small wins each step along the way. “Faster” and “smarter” are the most common descriptions we hear from customers who update their ERPs on schedule.

 

Costs should never be a surprise

Companies that are sitting on the fence when it comes to an ERP decision worry about the costs first and foremost. That’s not a shocker—cost concerns are the chief hurdle in any software negotiation.

The good news, for decision makers who are rightly worried about the investment is that ERPs across the board offer more than ever before, at a steadily decreasing sticker price.

Software-as-a-Service (SaaS) programs and apps that are stored on the cloud are driving down costs. Not all customers want or need to pay for the hardware, in-house servers, and maintenance costs of a traditional ERPs.

Forrester Research predicts “…the shift to SaaS will accelerate over the next three years and become the preferred deployment option for many types of businesses. For large enterprises, adoption will be more restrained near-term, but solutions are maturing quickly, and we will see significant adoption at scale for complex businesses within five years.”