ERP systems are always evolving and improving. In fact, it’s quite common to hear that a system will only last five to ten years before a company will implement a new one.
If you’ve identified that you’ve outgrown your ERP, or that you could be better served with a different one, then the next question is: when is the best time to change your ERP?
When NOT to Change Your ERP Software
Firstly, there are some occasions when it’s definitely not ideal to change your ERP software.
If you don’t already have an ERP system – and are currently managing with a combination of different software systems and a multitude of spreadsheets – then you should not wait. Putting off even starting the process, thinking you don’t have the time, is a mistake. There may never be a perfect time to undertake an IT implementation like this, but the sooner you start, the sooner you can begin to benefit from streamlined and automated processes, cost savings and greater efficiency.
It’s also vital that you undertake the process of changing your ERP while all the key staff are available. So that means not scheduling it for when anyone central to the project is away on leave. That includes anyone with an input into the project, so even the stakeholders within departments like sales, marketing and HR whose views on the data they want be included or the workflows they use need to be heard. While this will of course cause some planning headaches, it is important to ensure that everyone can be included so that you get the system you want.
Including your finance team is fundamental to the success of the project. So, you need to avoid key periods in the financial calendar when the team will be unable to give their full attention to the project. This might be during financial closeouts like end of year. Equally, you may want to schedule your switch to new ERP software so that it coincides with the beginning of a new financial year. In this case, you need to be sure to leave enough time ahead of your anticipated start date in order to be sure of completing the implementation in time. You should also build in sufficient contingency time in case of any unanticipated issues.
Finally, you should definitely avoid any times when your company is expected to be at its busies. If you have a seasonal business, or even have periods when the company is more busy than usual, then this will not be a good time. Staff for whom the ERP project is not their main responsibility will be busy with their day-to-day roles and will not be able to commit enough of their time and focus to much else.
Ensure Enough Time to Properly Review Your Options
Many companies find themselves in the market for a new ERP system because they have been notified that their current software is reaching end of life and will not be supported at some point in the future. This may be the whole system, or just support for a certain version of the software after a certain date.
There is often plenty of warning given in such situations, but it is best not to be complacent. If you find yourself in this situation, then you need to begin the review process as soon as possible so that you have adequate time to do it properly.
Your software vendor may hope that withdrawing support will force you and other customers to unquestioningly upgrade to another of their products. But this may not be the most suitable route for you. To be certain of getting the right system for your requirements, you need to allow time for a thorough assessment. You will want to evaluate all the software that is available – as well as the various implementation partners.
It’s also important to take the time to carefully appraise your needs. These may have changed since you chose your current ERP. You will likely have grown and evolved during that time and may have new requirements that your current system doesn’t meet that need to be considered.
Changing your software is also a great opportunity to make business process improvements or to adjust the way that you work. You should make any changes like this before you start the process of selecting a new system.
This all takes time, of course, so even if you seemingly have plenty of time, it’s best to start the review process as an immediate priority.
Avoid Reduced Knowledge Base
As your system ages, especially if it is bespoke or has been heavily customised over its life, then it’s likely that only a limited number of people will know how to operate it. And this number inevitably dwindles as time goes on.
As these key people organically age out of your business, you are left with a reduced knowledge base. This vital corporate knowledge is hard to maintain unless you have a formal knowledge-transfer process and central database that documents the information.
Also, with older software, there will naturally be fewer younger people coming through the ranks who have already learned how to use it. This too brings a reduction in the skills within your workforce.
By upgrading your software as soon as possible, you avoid this vital loss of expertise. Then there’s no risk of a substantial issue or even a critical failure when there are few employees who know how to deal with it.
Avoid Costly Upgrades
Even if it doesn’t seem likely that your ERP system will be retired or replaced soon, then it’s worthwhile reviewing things regularly.
Many ERP systems are systematically revised by their vendors, creating new versions that companies need to pay to upgrade to. While upgrading may mean less disruption than switching software, it can become costly over time to repeatedly upgrade to these new versions.
It’s prudent to reconsider your software if you are in this position. There may be other software providers who have innovated with new technology or superior functionality and whose ERP system might allow you to take advantage of a system that can give you more opportunities or improved efficiencies.
ERP software such as NetSuite, for example, is upgraded twice a year at no cost to its customers. Because it is cloud-based, core functionality is improved and new modules are added without affecting the users. Improvements to the software are therefore simple to roll out and are provided to all customers automatically and without upgrade fees.
For more information on how NetSuite can benefit your business, contact us today.