6 Signs Your Company Should Invest in a New ERP System Now

Introduction

ERP systems are at the center stage when it comes to business operations. They serve as a central database for your entire company making them integral to managing your core organizational workflows.

When you choose an ERP system, you’re choosing an important partner. A lot of your employees will invest time in using it. According to SoftwarePath, 26% of the employees in an organization use the company’s ERP system. 

These systems power collaboration, consolidate invaluable data, boost productivity, and form the bedrock of your enterprise technology infrastructure. So, it is crucial to use the right one – the one that supports and enhances your employee’s productivity. 

But that’s not always the case. Sometimes businesses get stuck with legacy solutions, products that have degraded over time, or perfectly fine software that just can’t keep up with their growth. 

Sound familiar? Read on for six signs that it may be time to consider breaking up with your ERP system.

#1: They Require Manual Data Entry

While ERP systems are designed to streamline data management, the reality for many finance teams is that they still need to reconcile bank statements and input invoicing data manually.

Shockingly, a study found that 92% of ERP users needed to manually intervene to facilitate data sharing, and 51% resorted to manual methods for data extraction. This often happens because ERP systems may struggle to pull data from various formats and file types, forcing teams to perform manual data entry.

Unfortunately, manual data entry is prone to errors and can cause delays. Your ERP should do the heavy lifting for you, and if it’s not, it might be time to consider upgrading your ERP system. An upgrade can restore full automation, freeing up essential resources needed for driving business growth and fostering innovation.

#2. They Don’t Give You Data in Real-time

Many businesses rely on an ERP system because of its capability to deliver real-time data. This not only facilitates faster decision-making but also provides a competitive edge. 

However, if your ERP system is sluggish and incapable of supporting real-time data sharing, it can result in poor customer experiences, particularly when your executives can’t access the latest information during a client call. 

The absence of real-time data also impacts your analytical capabilities. For instance, while your ERP system may store all your customer data, it might not display your clients’ real-time credit risk scores. This limitation can adversely affect your collections strategy and increase the risk of bad debt. 

Hence, real-time reporting, mobile accessibility, and cloud capabilities that enable ERPs to seamlessly integrate with various systems for generating real-time insights are of utmost importance.

#3. Your ERP Is Non-Intuitive and Doesn’t Get Along with the Latest Technologies

In this Finance 4.0 era, the longevity of ERP systems often exceeds their usefulness, leading to outdated interfaces and limited features.

Your finance team, especially the tech-savvy Millennials and Gen Z employees, can find these aging ERPs quite perplexing. They’re accustomed to intuitive interfaces and seamless connectivity, not the clunky relics of the past.

Also, an ERP system that can’t get along with your other tech tools can leave your employees feeling isolated in the digital age

As the business world rapidly evolves, your ERP’s inability to integrate with modern work apps and technologies can be a significant drawback. It hinders your ability to centralize data effectively and adapt to the latest advancements, including artificial intelligence (AI) and the internet of things (IoT).

Without these integrations, you risk falling behind in terms of operational efficiency, cost reduction, and accessing new markets through digital channels.

In short, if your ERP insists on being a digital loner, it’s time to reassess your tech stack and adapt to the changing landscape.

#4. Your ERP Has Stopped Putting in the Work

If you’ve been using your ERP platform for an extended period, you’ve likely witnessed various changes along the way. Ideally, these changes would have been for the better, but some solutions don’t age gracefully.

This is often the result of once-promising platforms being acquired by larger corporations, which can lead to a decreased focus on:

• Introducing new features
• Maintaining frequent release cycles
• Valuing customer feedback
• Enhancing customer support experiences

Managing ERP is a complex endeavor, demanding a continuous commitment to innovation, product enhancements, and user input. Unfortunately, when a specialized tool becomes a small cog in a sprawling machine of solutions, innovation may take a back seat.

If you’ve been patiently waiting for your long-standing platform to pivot and prioritize improvements, you might find yourself in an ERP relationship that’s reached a dead end.

Just like individuals, companies can transform, but it’s unwise to rely on it.

#5. Security and Regulatory Compliance Challenges

Much like a dependable partner, your ERP system should serve as the guardian of your business data while facilitating your growth. However, when dealing with outdated ERPs, you’re confronted with substantial security challenges stemming from lingering security vulnerabilities and frail access points.

This lagging ERP can trigger prolonged downtime, heightened susceptibility to security breaches, potential data loss, and frustrating delays in resolving system glitches. Furthermore, any compromise of sensitive data stored within your ERP might result in severe regulatory penalties.

Surprisingly, about 27% of business respondents still harbor concerns about security breaches when considering an ERP solution. If you find yourself among them, it could be a clear sign that you’re not utilizing the right ERP and should contemplate investing in a modern ERP system.

After all, your ERP should be your trusted ally in data security, not a liability that exposes your business to risks.

#6. Your ERP Cost Outweighs the Benefits

Companies adopt ERP software with the intent of enhancing operational efficiency, promoting seamless data sharing, and cutting down on expenses. However, when the financial burden of maintaining your ERP surpasses the benefits it brings, it’s time to reevaluate your ERP strategy.

Many major ERP vendors regularly hike up maintenance costs, often by an annual rate of 6%-7%. These cost increases can quickly eat into a substantial portion of your IT budget. If you’ve also undertaken customizations to incorporate new workflows and features, be prepared for additional expenses.

When you find yourself requiring more IT resources to manage your ERP, noticing a surge in manual labor needed to complete tasks, or grappling with heightened complexity in customizing and integrating apps within your ERP ecosystem, these are all telltale signs of diminishing returns on your ERP investment. They signify the need for a change.

Ready to Move On to a Healthier ERP Relationship?

If you have experienced any of these signs, it is an indication that you need to upgrade your ERP. You can improve your ERP’s efficiency in many ways. Some of them include:

• Upgrade your existing ERP: Work with your ERP vendor or IT consultant to understand the key issues and how they can be resolved. Several ERP vendors help you upgrade your ERP to the latest version at discounted costs and also support data migration. Alternatively, check if regular updates and fixes can make your ERP more efficient.
• Replace your system with a modern ERP: Replacing your ERP can be an expensive and time-consuming affair. But it can pay off if you are facing a lot of issues with your current ERP such as limited features or higher costs. Check for modern ERP solutions that support AI, advanced analytics, automated accounting, real-time reporting, and mobile app features.
• Expand the ERP’s capabilities through integrations: Another option would be to look for solutions that can complement your existing ERPs, working in tandem to extract data and give you better features and functionality. Financial reporting, cash management, and accounts receivable software are some solutions that you can look at to expand your ERPs’ finance capabilities.

OK, we’re going to put ourselves out there: at HighRadius, we support you in making your ERP more robust. Our cloud-based AR software solution—Autonomous Receivables—can plug in with ERP systems to streamline invoicing, collections, cash reconciliation, and deductions management. 

We also offer plug-and-play integrations with leading ERP systems such as NetSuite, Sage Intacct, Microsoft Dynamics, SAP, and Oracle. 

But enough about us. Let’s talk about you. We’re eager to learn more about your finance team’s aspirations and goals and demonstrate the kind of ERP partnership we believe you deserve.