ERP systems are at the center stage when it comes to business operations. An ERP software is integral to managing core organizational workflows as it helps store all critical business data.
According to SoftwarePath, 26% of the employees in an organization use the company’s ERP system. If you are already using ERP, you are aware of its importance to your organization. According to Selecthub, 88% of organizations attribute their growth and success to ERP implementation.
Though ERPs have been considered as the be-all and end-all for most businesses’ digital needs, it is not the entire truth. Among the above-mentioned 88% of organizations, only 5% of the organizations use their ERPs effectively to create and augment high-quality data, which is key to effective analytics and insights.
Outdated ERP systems are a huge impediment to your organization. They reduce efficiencies, increase the complexity of your workflows, and lead to security loopholes.
In this article, we look at the 5 signs that indicate you have outgrown your ERP:
One of the advantages of new-gen technology is its ability to provide data in real-time. This supports faster decision-making and offers a competitive advantage.
Many ERPs are slow and do not support real-time data sharing. This leads to bad customer experiences if your executives aren’t able to pull up the latest information during a client call.
Lack of real-time data also affects your analytics capabilities. For example, your ERP might store all your customer data but is unable to show you clients’ real-time credit risk scores. This can affect your collections strategy and increase the risk of bad debt.
Real-time reporting, mobile access, and cloud capabilities that allow ERPs to integrate with multiple systems to generate real-time insights are thus crucial.
According to a report, the average life of an ERP is 5-10 years, but many companies use their ERP for around 20 years.
In the Finance 4.0 era, this leaves your ERP outdated, both in terms of its user interface as well as its features and capabilities. Your finance team, especially your Millennial and Gen Z workforce would find the ERP complex since they are used to connected devices and intuitive interfaces.
Outdated ERP systems will also be difficult to integrate with the latest work apps. Centralizing data will then become a challenge.
Outdated ERPs will leave you lagging in adopting the latest technologies such as artificial intelligence (AI) and internet of things (IoT). They also diminish your ability to improve the speed of your operations, reduce costs, and gain access to new markets via digital channels.
Your ERP is a treasure trove of business data. Outdated ERPs pose serious security challenges as they may have unfixed security bugs and vulnerable access points.
According to a study, 87% of business computers feature outdated software, including ERPs that are not up-to-date.
Higher downtime, increased security attacks, data loss, and delays in rectifying system issues are all signs of an outdated ERP. Any loss of confidential data stored in your ERP may also attract regulatory penalties.
Companies implement ERP software to improve efficiencies, support data sharing, and reduce costs. But when the cost of running and maintaining your ERP exceeds the gains from it, you need to re-think your ERP strategy.
Most large ERP vendors increase maintenance costs by 6%-7% annually. This can consume a large portion of your IT budget. Customization of the ERP to add new workflows and features will further increase costs.
The need for more IT resources to manage ERP, an increase in the manual effort needed to complete tasks, and higher complexity in customizing and integrating apps to your ERP ecosystem are all indications of diminishing returns from your ERP investment. It points to a need for change or an upgrade.
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