When Should You Replace Your ERP Software?

Mark Canes

Unfortunately, there is no hard and fast rule as to when it’s time to replace your ERP software, and instead it will depend on a variety of factors, including the software vendor, technology, your business processes and how well you have maintained the system. However, there are several things that you can to do extend the lifetime and ROI of an ERP solution, and some companies have benefited from using the same solution for 20 plus years.

Pick the Right Vendor

Certain software solutions are geared towards growing businesses and then there are some systems designed for small and start-up businesses. The major different will be limitations in the functionality, transaction volume and number of users. While introductory systems are great for start-up and small businesses, they typically focus on one area of functionality (such as accounting). Because of their simplicity and focus on one area of business operations, they require minimal training and have low costs, but will not be able to accommodate growing requirements. These types of systems lack functionality for managing other areas of the business such as inventory and warehouse management, and do not provide features to help your business grow and expand into new markets (such as eCommerce). Introductory-type systems like this usually also have limits on the number of users and volume of transactions.  Instead, look for a system that allows you to add extra features as your business model changes and you continue to grow. ERP solutions such as Blue Link, provide basic functionality for inventory and accounting, plus additional features for managing eCommerce, POS, lot tracking, barcode scanning and more – features that may not be necessary from day one, but that are very important to growing operations.

Implement Regular Upgrades

Most ERP systems will provide annual or bi-annual upgrades to the software. This benefit is usually included as part of your regular monthly license fees and help to ensure the software is working and providing benefits for years to come. Not only do upgrades fix any bug issues, they also provide your business the opportunity to take advantage of new features added by the software vendor. Regular upgrades also make sure you’re always on the latest and greatest technology and help to keep up with industry changes. Not all vendor upgrades are created equal, however, so make sure you work with a vendor that is continuously updating their system and includes any customization as part of those regular upgrades.

So when is it time to replace your ERP software?

Our advice: think hard about your current productivity with your software system. Are there any pitfalls? Are you losing hundreds of hours of productivity a year? Have you hired someone new to keep up with the demands of the business whose job could otherwise be replaced by a proper software system? Are your customers looking elsewhere to get quicker answers or faster service? If the answer to any of these questions is “yes” then a new software system will pay for itself.

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