There are four reasons why you should think carefully about whether and when to change an ERP system
Do you know these four people in the picture? Take a close look!
These are the employees you always need for every project. The one without whom nothing works!
Because of these four employees, you should only change an ERP system if all other important tasks have been completed and you can afford to leave improvement projects in supply chain management on hold for two to three years.
These days, I have once again had to deal with two companies that are struggling with serious challenges in their supply chains and are putting off a lot of homework because they have not been able to solve the problems that have arisen in these turbulent times. Both companies are now considering implementing a new ERP system in one case and a very large release upgrade in the other.
I urgently warned both companies against taking this step! The introduction of a new ERP system, as well as extensive release upgrades, place extreme demands on the “four to five” key people who have to be involved in every project to make it a success. The financial challenges that are also associated with the introduction of an ERP system are not mentioned here.
In my years in the business, I have seen several companies stumble as a result of such extensive system changes.
The introduction of an ERP system is not only accompanied by the risk of the system implementation going wrong because the value chain can no longer be controlled or invoices can no longer be created. At least as great a risk arises from the fact that hardly any company has the human resources to carry out the other projects that are necessary to at least maintain the level of productivity and efficiency in addition to the system introduction.
What to do? In such cases, it makes far more sense to do all the other homework first and increase productivity levels and earnings. If you then tackle the ERP project, it practically finances itself from the productivity gains. If you take the opposite approach, as I unfortunately often have to experience, you pay twice: for the ERP system introduction and for the loss of productivity – and bear a great entrepreneurial risk.
If you want to introduce a new ERP system because the planning and control of the value chain urgently needs to be improved, it makes more sense to fall back on an add-on system instead. This is more cost-effective and can be introduced with less effort and less time. Good add-on systems provide even more functionality for planning and controlling the value chain than even large ERP systems can offer. Switching planning and control activities from the ERP system to the add-on system does not have to be done in one go and is therefore practically risk-free. Changing the ERP system “above” the add-on system at a later date also poses no risk to the operational processing of the value chain. We have already had this experience several times in recent years.
This route leads to more functionality more quickly and with less risk than an ERP system change. And it can also become even more cost-effective if you no longer configure the planning and control functionality in the ERP system, but leave it in the add-on system.
What experiences have you had?
Image: Bing AI
