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How Do You Know You Really Need A New ERP System?

How Do You Know You Really Need A New ERP System?

ERP and CRM Systems  |  Service Businesses  |  Healthcare  |  Nonprofit  |  Manufacturing & Distribution  |  Construction & Real Estate

There are a lot of reasons people land on our website looking for a new ERP system. More often than not, those organizations really just need a facelift for their existing software systems, rather than the whole song-and-dance of a new ERP implementation.

Here are the top two cases where a new ERP system might not be necessary:

1. “My Software Isn’t Working For Me Anymore, And Neither Is My Software Vendor”

You’ve probably seen articles or notifications about “bug fixes.” Reputable, viable software developers (like Microsoft and Sage) release bug fixes and upgraded versions to improve customer functionality. Sometimes they update operating systems to fix known security flaws.

Business owners and managers who do not keep up with the latest versions can wind up with an expensive software package that serves their organization no purpose. Without updates, that software can quickly become obsolete.

Sometimes business leaders don’t understand what upgrades and software services they should and shouldn’t be paying for. Here are a few guidelines:

  • The majority of software manufacturers charge an annual percentage of the value of your software. Pay it. This allows the manufacturer to keep your software up to date and add new functionality to keep your team working efficiently.
  • Even though most businesses pay the software manufacturer the annual software maintenance, they do not pay their ERP consultant to perform the upgrade at least every other year. Even if the new features seem like they don’t benefit your organization, you should do it anyway to stay current on Microsoft’s latest server and workstation operating systems.
  • Even if you have add-ons and customizations, don’t avoid upgrading. You should have all your customizations clearly documented and pay your customization vendor an annual fee to assure it's also kept up to date.

Often we get calls from business owners and managers asking if they really need to renew their software maintenance agreement. Or worse, we’ll get a call from a confused business owner who doesn’t know how to contact their software vendor about a critical business application upgrade. In that case, we’ll quickly do some research and get that business owner in touch with their vendor, and keep tabs on them to make sure they’re being taken care of.

Having a good relationship with your software vendor (i.e. the company you purchased your software from) is essential to keeping your software up to date, and your employees in the know. If you can’t get that from your existing vendor, then perhaps you don’t need a new ERP system. You need a new vendor.

If you have a robust, high-end ERP system, you have likely customized your software to your specific needs – go, you! While that might mean you can’t go through an update on your own, it doesn’t mean that you should ignore your updates or let a year go by without checking with your software vendor.

The best way to maintain viability with your ERP system is to lock your customization vendor into an annual upgrade assurance agreement. We find that having a set annual renewal with your software vendor, add-on vendors, and your customization developers is an absolute key to having a smooth-running ERP system.

2. “My Employees Don’t Really Like Using This Software Anymore”

How often do your employees go through training for software they already use? While it sounds counter-intuitive, this is really the best way to achieve software literacy in your organization.

A lot of times, we’ll find communication gaps between long-time software users and new users. This communication gap combined with employee turnover can cause an ERP system to appear obsolete or ineffective, which really isn’t the case.

There are a few ways you can prevent this from happening in your organization. 

When performing a software update, key directors should evaluate the software’s new features and determine if any existing business processes should be reshaped based off of the software’s new functionality. After your directors work with the new features and communicate with their users, it’s time for some employee training. With formal annual employee training, your employees’ software literacy will get a big boost, resulting in improved efficiency and morale within your organization. (Bonus tip: these training sessions should be recorded and all software updates documented.)

Discover five different applications in Microsoft Office 365 that can keep  your team more productive than ever before…

While some businesses tend to forgo training for existing employees, others are chomping at the bit to provide more training, but they can’t find the right resources. Oftentimes, online vendor manuals can be unhelpful, or you’ll find a “how-to” video, but it’s not specific enough to what you need. There’s a reason for that.

Even when you have an industry specific package, the vendor manuals focus on what a specific feature can do, not necessarily how your business would use it. For example, you would think that entering an accounts payable vendor invoice is basic: just enter vendor ID, invoice number, invoice amount, and distribute to proper general ledger account numbers, right?

Wrong. Depending on your business, you have to consider approval routing, 1099, EFT, intercompany accounting, project/non-profit costing and more.

There are also different supervisor documentation processes and a variety of ways your business could use the software to facilitate your organization’s various workflows.

The best way you can make use of the resources out there is to use the vendor’s documentation as a framework resource, then add in what you’ve learned and what your software provider has specifically taught you about how you use the software. Keep that document on a shared network drive for all (and future) employees to reference.

The Verdict?

Unless your business needs have drastically changed or your vendor has vanished, you should include software updates and training in your annual budget. Your business processes will remain efficient with proper bug fixes and upgrades, your employees will be happier with the right training, and it will save money in long run. If you have all of these items checked off on your list, then congratulations—you and your software vendor are doing great!

If you identify way too much with some of the pain points in this post, then it may be time to search for a new software vendor that puts your organization’s needs at the forefront.

Need Help?

Figuring out if you need a simple update, a new ERP system, or a new software vendor can be tough. Contact Chris Haiss here or call 410.685.5512 for some real, candid advice to help you through this decision.

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About Christina Haiss

Chris plans, implements and customizes ERP software solutions. Her knowledge of ERP systems, combined with her background as a CPA, ensures that she delivers practical, well thought out accounting systems to clients. She specializes in NetSuite, Microsoft Dynamics GP and Sage 100c, and has a soft spot for accounting and project management systems for construction contractors. If you’ve never heard one of her hysterical travel stories, you’re missing out. Ask Chris about getting stuck in quicksand, hunting for gators, and her close encounter with a bear.