Since I've been working on several ERP selection and design projects lately, it has reminded me of how challenging these projects can be. It is no wonder 80% of them fail! There are countless details, complex designs, cross-functional and cross-organizational collaboration required and varying skills and leadership styles required to survive, let alone thrive.
Thus, it made me think about ERP system goals. When should you upgrade/implement an ERP system?
- Support growth: No matter how lovely QuickBooks reports look and how easy it is to use, it will not support profitable and rapid growth in manufacturing over the long haul. QuickBooks is not alone; there are many examples of other ERP systems with limiting factors that will no longer support growth. If you aren't growing, you are declining. Thus, you must think about the infrastructure required to support growth before the decision is made for you.
- High levels of customization: Unfortunately, the more you customize with older systems, the harder it will become to upgrade yet the more important it will become to upgrade. The sooner you tear off the bandage, the better. Otherwise you could wind up super glued to an anchor weight on a sinking ship. Who wants that?
- M&A: If your company is running multiple systems due to mergers and acquisitions (or for other reasons), it is time to consider an upgrade. In order to grow and to prosper, you'll need to be able to see across your facilities, companies and the like.
- For the Customer: Customers are requesting higher and higher levels of service. Business models are changing. For example, in some industries, e-commerce functionality has become a must. In other cases, large customers are dictating programs and requirements which bring the need for upgraded systems. Are you thinking about where your customers are headed?
- Leverage: One of the keys to success in any business is leverage. Can you deliver faster? Can you turn a 10-person job into a 1-person job? Can you grow quicker than your competition while providing exceptional customer service? You'll need leverage.
For as challenging as upgrading and implementing a new system can be, you should be crystal clear on your reasons WHY. However, once you have your reasons identified, do not delay. Throw out the idea unless it’s compelling. However, if your reason is compelling, MOVE! It can be overwhelming to think about a new system; however, it is also easy to get passed up by your competitors who aren't bogged down with outdated infrastructure.
There is no "right time"; unfortunately upgrading your systems infrastructure is always painful; the question is whether you spend a lot of money, resources and time when it's too late to turn it into an advantage. In essence don't wait for it to become a survival project; move when it is still a project that will accelerate your success.
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