I’ve been working in the enterprise resource planning (ERP) software space for a long time. I have observed two basic scenarios that cause companies to decide to change out their system.
- Their old system becomes unusable for some reason. Maybe it became a technology issue with new hardware and operating systems. Maybe it was no longer able to adapt to necessary changes in operations. Maybe the supplier is going out of business or sunsetting the product. For whatever reason, the company is forced to make a change NOW!
- The timing is right. Maybe there is a lull in the normal frenzy of daily operations. Maybe the company has decided to go in a new direction that is unsupported by the current system. Maybe they have obtained a financial windfall. Maybe they want to get ahead of all the reasons listed in #1.
If the timing is derived for reasons listed in #1, it’s going to be a struggle. You’re going to want to go fast and that is going to cause maximum disruption. The reasons listed in #2 afford you more options to manage the timing to balance the disruption.
Plan For The Worst And Hope For The Best
Great companies know that there will be economic downturns. Their timing may not always be totally predictable, but that they will happen is. Companies can choose to act like young NFL football players who suddenly find themselves in the millionaire’s club. They spend wildly on frivolous things that they don’t really need. When that career-ending injury comes, they find themselves broke. Or they can choose to plan for the bad days ahead.
In my experience, the companies that plan ahead use downturns to enrich themselves. Rather than having to lay people off and implement an austerity program, they use the money they have stashed for such a day to make structural improvements that will allow them to enjoy accelerated prosperity when the market eventually turns up.
If you are one such company, congratulations! We are entering the perfect time to bolster your infrastructure. One way to do that is to swap out that ancient ERP system that’s “still working.” Most of the traditional companies (like Oracle and SAP) have moved their ERP systems to the web. However, there are newer entrants like Accumatica, PLEX and Wherefour who are web native.
Picking a new ERP system is the most critical decision your company will make. Period. It’s not just about the cost of the system, or even the cost of implementation (both of which are considerable), but it also impacts the future operations of your company. Can you save money on operations with more efficient processes? Will you be able to add new capabilities when you would like without having to regret your software decision?
Far too many companies are guided to document current processes and find a solution to fit. This approach is a squandered opportunity. The better option is to reengineer your processes to be superior to what you can do now and find a solution that supports those. No matter what anyone tells you, implementing a new ERP system is disruptive and time-consuming. What you get out of the effort will depend on your up-front planning. I would encourage you to have a free, no obligation, no pressure chat with me if you are thinking about a change. I would be happy to share my thoughts and experiences with you and give you some things to think about. After that, I will leave you alone. If you want to talk some more — you know where to find me.
