4 Signs it’s Time to Upgrade Your Distribution ERP Software

Mark Canes

As a small business owner it is inevitable that some of your time will be spent putting out fires, and dealing with issues as they arise on a daily basis.  For wholesale distribution companies this may include: time spent searching through various systems and files to find information on specific orders, doing physical inventory counts to determine actual inventory volume and calculating different price levels for customers when vendors change their costs.  Although the flexibility to do this is often seen as a benefit of being a small business, it is important to not let it get in the way of executing other projects and achieving your strategic goals. As a business owner, you should try to avoid becoming so overwhelmed dealing with everyday tasks, and putting out fires, that you're unable to focus on the core success factors of your business.  One solution is to begin looking for a more robust distribution ERP software system in order to streamline operations, automate processes and reduce the amount of time spent manually managing your business.  Although this may be one of the most important reasons to upgrade your existing software, four more are outlined below.

(1) Your current systems lack integration with one another.

Lack of integration may include all or a few of your existing systems such as: accounting, CRM, inventory management and eCommerce.  Although each of your existing software systems may work perfectly well independently of one another, as your company grows the issues that arise from lack of integration will start to become more and more obvious.  Working with multiple disparate systems means that the same data must be entered several times, which can lead to keying errors and inconsistent information.  In addition, if one system gets upgraded, this version may no longer be compatible with your other systems for managing simple tasks like importing and exporting data.

(2) Your current system is no longer supported, has reached its end of life, or is a sunset program and will no longer be developed.

Just as you have a business to grow and manage, so do software vendors, which means they may discontinue development on older systems in order to focus on more modern and lucrative software initiatives.  Although this issue is unavoidable, it is important to be proactive in finding a new solution when this happens.  With no support or further development, your system is more vulnerable to security threats and will no longer receive system patches.  As with purchasing insurance, upgrading your software system is more beneficial when carried out pro-actively in order to protect your business from future issues.

(3) Your existing system does not include features that are becoming industry standard.

Often when speaking with potential customers, the items included on their wish list are actually basic features, typically included in all systems of the same calibre.  Simple pieces of functionality like reporting and analytics, integration with email tools for emailing invoices, and serialization capabilities can provide huge improvements in efficiency for those without them, even before looking at the bells and whistles of a distribution ERP system.  Since these are considered basic pieces of functionality, it is likely that your competitors already have them included in their system.   This means that they are able to spend their time on the core aspects of their business and generating new sales, as opposed to spending their time managing processes that should be taken care of with a proper software system.

(4) Your business is growing.

Although this factor may seem fairly obvious, companies in this situation frequently take the “if it ain’t broke, don’t fix it” approach when it comes to upgrading their software.  If your system is working fine for you now, why bother upgrading? However, with a growing company this mentality can cause several issues.  Firstly, depending on the rate of growth you may end up stuck with a solution that does not work for the size and type of organization you've grown into, and with limited resources and time to find a new one.  This can lead to stress on the company and employees as they struggle to keep up with growth and increased demand, while using software tools meant for much smaller volumes. In addition, as your company grows your processes may change, which can leave room for opportunities with new software that weren't previously available.  Examples include: eCommerce integration, mobile picking, and barcode scanning.

As a small business owner it can be difficult to recognize the signs above when dealing with everyday issues and running a business.  However, taking initiative to find a new distribution ERP system when the signs are there, will help you prepare for a future of growth and profitability.