20 Signs You Should Replace Your Legacy ERP System
Having an adaptable and efficient enterprise resource planning (ERP) system is essential for staying competitive in an increasingly crowded market. However, many organizations find themselves relying on outdated ERP systems that can hold them back. Recognizing when it’s time for an upgrade is essential for your growth and success.
In this guide, we’ll explore the lifespan of ERP systems, the signs that indicate it’s time for a change, and the benefits of switching to a cloud-based ERP solution.
How Long Should Your ERP System Last?
Generally, you can expect an ERP system to last between five and 10 years, though some systems can serve you well for even longer. Several factors come into play:
- Technological changes: As technology progresses, so do the needs of your business. If your current ERP can’t keep up, it might be time to explore your options.
- Business growth: If your company is expanding, your ERP should be able to grow with you. A system that doesn’t scale can quickly become a limitation.
- Vendor support: Regular updates and support from your vendor are key to keeping your ERP effective and secure. If support is lacking, your system’s lifespan may be at risk.
Regularly checking in on how your ERP aligns with your business goals is a smart way to ensure it remains a valuable tool.
Is It Time for an ERP Upgrade? 20 Signs You Need a Replacement ERP
Knowing when it’s time to replace your ERP system can significantly impact your operations. By paying attention to these signs, you can figure out if it’s time for a change.
1. Your Current ERP System Is Misaligned with Your Business Goals
As your organization evolves, your ERP should evolve with it. If your system no longer supports your current objectives—like launching new products or entering new markets—it may be time for an upgrade. A solution that aligns with your strategic direction can help drive growth and innovation.
2. Your ERP System Struggles with Scalability
If your ERP is having difficulty accommodating increased demands—whether from more users, transactions, or data—it’s likely holding you back. A robust ERP system should scale effortlessly to meet your growing business needs without causing stress or delays.
3. Your Current ERP System Silos Data & Stalls Communication
In today’s interconnected world, your ERP needs to streamline communication and encourage collaboration instead of holding you back. If your system creates data silos or causes confusion among teams, a new solution could enhance collaboration and efficiency, allowing your organization to function more cohesively.
4. You’re Dealing with Slow, Cumbersome Processes
Technology should simplify your work, not complicate it. If your ERP is causing bottlenecks, delays, or excessive manual tasks, it’s a clear sign that it’s time for a change. An upgraded system can streamline operations and free up valuable time for your team.
5. Your Employees Prefer Spreadsheets Over Your ERP
If team members are opting for spreadsheets over your ERP, it may be too complex or not user-friendly enough. Listening to their feedback is essential; a more intuitive system can empower your employees and enhance productivity.
6. Your ERP System Experiences Frequent Downtime or Security Issues
If you’re dealing with data loss or security concerns, it’s important to take action. Protecting your organization’s sensitive information is critical, and an outdated system can put you at risk. Upgrading ensures you have the latest security features and reliable support.
7. Your ERP Maintenance Costs Keep Rising
If you’re spending more on maintaining your current ERP without seeing a return on that investment, it’s time to reassess. Allocating your resources to a more efficient system can lead to greater savings and improved functionality.
8. Your Current ERP System Negatively Impacts Customer Satisfaction
Your ERP should enhance customer experiences, not hinder them. If you’re facing delays in order processing or inaccuracies in inventory management, it can damage your relationships with clients. A new ERP can help you deliver a seamless and satisfying customer experience.
9. Your Vendor No Longer Supports Your ERP Software
Software vendors are under intense pressure to keep their applications competitive. Often, this means wholesale transitions to a new underlying platform or a complete end-of-life (EOL) of your version of their software. As a result, they set a date after which they will no longer offer support, updates, and patches on the legacy software that allow it to run its best and respond to evolving security threats. While the product may still work for you on a day-to-day basis, the lack of incremental improvements will eventually cause problems.
If your ERP vendor is no longer providing support for your software, it’s time to consider a new solution. Running a system without adequate support puts your business at risk, as unexpected issues can arise at any time. Ensuring your ERP is supported allows you to maintain stability and security.
10. Your Current ERP System Lacks Essential Functionality
Some ERP solutions struggle to keep pace with market changes, leaving you without the modern features that could benefit your business. If your legacy system feels outdated, it’s time to evaluate options that offer the functionality you need to thrive.
11. You Find Yourself Implementing Workarounds
When your ERP requires constant workarounds to meet your needs, it’s a sign that it’s not serving you effectively. Just as you may have done before implementing an ERP, reverting to old habits can lead to frustration. An updated system can provide the adaptability your evolving business requires.
12. Your ERP System Is Not User-Friendly
If employees are struggling to navigate your current ERP, it may be time for an upgrade. And if you’re looking to attract new team members, it’s likely they will become frustrated with the software as well—leading to higher staff turnover and difficulty in attracting the next generation of savvy workers who expect newer, intuitive applications.
A user-friendly system empowers your team, allowing them to access information quickly and efficiently. Improving usability can lead to higher productivity and satisfaction.
13. Your Current ERP System Doesn’t Support Your Future Growth
As you consider where your business is headed, it’s essential to have a robust and flexible ERP system that can scale and adapt. If you’re experiencing any of the issues discussed, your current ERP system may not be equipped to support you moving forward.
14. You Feel Like Just Another Number to Your Vendor
Personalized support is crucial for a successful ERP partnership. If your vendor doesn’t take the time to understand your business and provide tailored solutions, it may be time to find a partner who values your unique needs.
A strong vendor relationship fosters collaboration and ensures your ERP system continues to meet your evolving requirements.
15. ERP Software License Costs Keep Rising (Without Clear Justification)
If you’re experiencing unexpected price hikes after initially low rates, it’s important to reevaluate your options. Understanding the fine print and potential implications of cost increases will help you make informed decisions about your ERP investments.
16. Your ERP Software Doesn’t Offer Real-Time Visibility into Your Inventory, Processes, or Supply Chain
If your current ERP lacks real-time visibility into your inventory or manufacturing processes or if you can’t view data at every stage in your supply chain in real time, it’s time to upgrade or replace your ERP. The best software lets you easily access this critical information to make informed decisions.
17. You Can’t Access Your ERP On-the-Go
Contemporary ERP systems are often delivered as software-as-a-service (SaaS), cloud-based software, providing complete business visibility and a seamless transition experience from the office, home, and on your mobile devices. Cloud-based ERP systems are accessed via the internet, allowing your staff 24/7 access on any mobile device.
18. Your ERP Integration Options Are Limited
Your ERP should integrate well with third-party systems, such as customer relationship management (CRM) platforms or accounting tools. You don’t want your staff trying to manage multiple systems and re-entering the same data multiple times, which can lead to errors and lots of time wasted. Look for ERP software with a flexible application programming interface (API) that lets your team tap into third-party tools to work more efficiently and provide better customer service.
19. You’re Falling Behind the Competition
With technology evolving at an unprecedented pace, it can be challenging for your team to keep up with these changes and maintain the professional certifications they need to properly support these systems. Keep in mind that as you struggle to keep your old ERP running, your competition may have already invested and deployed software that doesn’t require this extra effort, giving them a competitive edge.
20. Your ERP Is On-Premises, Requiring Internal IT Resources & Risking Data Loss
If your legacy ERP is running on a server in your on-premises computer room and the server malfunctions, you risk catastrophic data loss. On-premises computing also requires internal IT resources to secure, manage, and maintain the hardware.
Cloud-based software is faster to implement and doesn’t require in-house IT resources. These systems enhance data security and disaster recovery and provide rapid updates and upgrades to keep the ERP software up to date.
Why You Should Switch to a Cloud-Based ERP System
As you explore options for replacing your ERP, consider the many advantages of cloud-based solutions.
1. Cost Efficiency
Cloud-based ERP systems often reduce upfront costs, eliminating the need for heavy investments in hardware and software. Plus, ongoing maintenance costs are typically lower, freeing up your budget for other priorities.
2. Real-Time Data Access
With a cloud ERP, you can access data anytime, anywhere. This flexibility empowers your team to make informed decisions quickly, keeping you agile in a competitive market.
3. Enhanced Collaboration
Cloud solutions create a unified view of your organizational data, promoting teamwork and effective communication. When everyone has access to the same information, collaboration flourishes.
4. Scalability & Flexibility
Cloud ERP systems can easily scale with your business. Whether you’re adding users or expanding functionalities, adjusting your resources is just a click away.
5. Improved Security
Cloud providers invest heavily in security features, safeguarding your data from potential threats. Regular updates ensure you’re always protected with the latest security measures.
6. Business Continuity
In case the worst happens, cloud-based systems offer enhanced disaster recovery capabilities. This security and continuity means your data remains accessible, ensuring you can continue operations smoothly.
ERP Upgrade FAQs
When Should I Change My ERP System?
Consider upgrading your ERP when you notice inefficiencies, such as manual processes, operational bottlenecks, or a lack of support from your vendor. If your system is hindering your business growth, it’s time to explore new options.
How Long Should an ERP System Last?
An ERP system typically lasts between 5 to 10 years, though some can serve you longer with the right support and updates. Regular assessments can help you determine when it’s time for a change.
Why Change Your ERP System?
Upgrading your ERP can lead to improved efficiency, better data management, and a more user-friendly experience. A modern system can streamline processes and support your organization’s growth.
What Happens If You Don’t Replace Your ERP System?
Neglecting to upgrade can lead to inefficiencies, increased costs, and missed opportunities for future growth. An outdated system can compromise your competitiveness, so addressing these issues promptly is essential.
What Should I Look for When Replacing an ERP System?
When exploring new ERP solutions, prioritize scalability, integration capabilities, vendor reputation, and ongoing support. Engaging stakeholders in the decision-making process ensures that your new system meets everyone’s needs.
Ready to Upgrade Your Legacy ERP System?
Deciding to replace a legacy ERP system is a significant step for any organization. By recognizing the signs that it’s time for an upgrade and considering the advantages of a cloud-based solution, you can set your organization up for greater efficiency and growth.
At CAI, we create innovative, production-oriented software to help our customers across a variety of industries streamline business processes and optimize their manufacturing, processing, or distribution environment. Our goal is to provide you with industry-leading solutions that improve your business operations, all with excellent service and support.
Whether you are looking to automate production, increase your return on investment, reduce costs, or streamline operations, we can help. With our suite of ERP systems and access to our expert team, optimizing your business processes is easier than ever.
Contact us today for a free consultation.