Integrative Improvement Blog

The integrative improvement blog discusses and provides commentary on the latest topics in the business performance improvement sector.


How do you know when it’s time for an ERP system revamp?

How do you know when it’s time for an ERP system revamp?

Modern manufacturing demands dictate that an organisation’s ERP system should be accessible from anywhere within the enterprise. Logistics service providers need to know when products will be available, and warehouses must send information back to the manufacturer to ensure supply and demand fluctuations are easily met. However, the limitations of legacy or company-specific ERP systems are starting to stifle manufacturing capacity.

Over the years, organisations with these older ERP systems, manufacturing firms in particular, have been trying to keep up with expanding global markets by continually updating and customising their on-premise systems. But, according to Gartner, these legacy systems – some as old as 20 years – are proving increasingly expensive to maintain and difficult to manage, when compared to the more sophisticated cloud-based solutions available today, capable of delivering the business functionality that users are demanding.

So do you suspect that your legacy ERP system is no longer up to the task? Review the following five questions to see if it’s time to consider a new ERP system:

  1. Is your organisation growing exponentially and in need of a system to keep up with future growth expectations?
  2. Are you planning to add new businesses by merger or acquisition?
  3. Are you using a highly customised system that doesn’t allow the ability to upgrade to new, more efficient technology platforms?
  4. Are all your users, however infrequent, able to interact with the ERP system regardless of device and without requiring weeks of upfront training?
  5. Are you worried about data security? Consider all the valuable data produced and shared between customer service, human resources, finance, IT, warehousing, and manufacturing.

If you answered ‘yes’ to any one of the above questions, your organisation may need to consider replacing its existing solution and integrating a next-generation ERP system.

ERP and continuous improvement

Legacy ERP systems typically automate only a single business function and not an entire, cross-functional business process. In fact, they demand manual, labour-intensive processes, such as re-entering data into separate systems.

One of the hallmarks of a next-generation ERP system is data accuracy. Essentially, one input of data means that single input carries from process to process. With no re-entry required, your potential for error significantly declines.

In the process, ERP can greatly support your continuous improvement initiative by streamlining quality standards and business processes. These include tracking and managing orders, shop floor activities and product deliveries.

A well-implemented ERP system can act like a magnifying glass into your business’s operations, allowing you to drill down into key processes. It’ll give you the tools and wide-ranging statistical context that you need to connect actions with concrete results on your shop floor and set performance metrics based on concrete data. From there, you can then hone in on areas of waste and work continually to reduce excess costs.

Of course, shifting away from a legacy system isn’t easy. It’s like being stuck in a bad relationship. You feel trapped, because you’re depending on that system to help you meet your obligations, but you know you could be operating more efficiently and with fewer headaches if you could find a better solution. So consider external advice, such as gauging your organisation’s readiness for a new ERP system implementation. Then take advantage of the emerging technologies to place your organisation on the road to success.

Is your current ERP system being limited by your data and processes? To determine the answer, read the article Five signs your business processes are curbing ERP success.

 

About TRACC
The TRACC framework helps organisations build standardised and integrated good practice and performance capacity across their Plan, Source, Make and Deliver functions. Simultaneously it accelerates their collaboration and alignment capacity to build world class end-to-end value chains, enabling the organisation itself to become the ultimate source of sustainable competitive advantage.

 

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