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5 Signs You’ve Outgrown Your ERP

What you’ll learn


  • ERPs are integral to running a business smoothly
  • Outdated ERP systems pose more challenges than it helps solve
  • Upgrading ERPs or adding to their capabilities through the right integrations helps businesses achieve higher ROIs

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 Outdated ERP systems are a huge impediment to your organization.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:

5 Signs You've Outgrown Your ERP system

1. Your team continues to enter data manually

The main purpose of an ERP is to eliminate manual work from the data management process. Yet, many finance teams still need to input manual efforts to reconcile bank statements and share invoicing data.

According to a study, 92% of ERPs needed manual intervention to enable data sharing. 51% of users rely on manual methods to extract data from their ERPs.

Often your ERP may not be able to pull or read data from the different formats and file types that you use, forcing your team to enter data manually. Manual data entry often results in delayed timelines and an increased chance of errors.

2. You find it difficult to obtain data in real-time

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.

3. Your ERP is non-intuitive and doesn’t integrate with the latest technologies

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.

4. Security and regulatory compliance challenges

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.

5. Higher costs of maintaining the ERP

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.

Next Steps

If you have experienced any of these signs, it is an indication that you need to upgrade your ERP. You can improve your ERP’s efficiency in many ways. Some of them include:

  • Upgrade your existing ERP: Work with your ERP vendor or IT consultant to understand the key issues and how they can be resolved. Several ERP vendors help you upgrade your ERP to the latest version at discounted costs and also support data migration. Alternatively, check if regular updates and fixes can make your ERP more efficient.
  • Replace your system with a modern ERP: Replacing your ERP can be an expensive and time-consuming affair. But it can pay off if you are facing a lot of issues with your current ERP such as limited features or higher costs. Check for modern ERP solutions that support AI, advanced analytics, automated accounting, real-time reporting, and mobile app features.
  • Expand the ERP’s capabilities through integrations: Another option would be to look for solutions that can complement your existing ERPs, working in tandem to extract data and give you better features and functionality. Financial reporting, cash management, and accounts receivable software are some solutions that you can look at to expand your ERPs’ finance capabilities.

At HighRadius, we support you in making your ERP more robust. Our cloud-based AR software solution—Autonomous Receivables—can plug in with ERP systems to streamline invoicing, collections, cash reconciliation, and deductions management. We also offer plug-and-play integrations with leading ERP systems such as NetSuite, Sage Intacct, Microsoft Dynamics, SAP, and Oracle

Get in touch with us to discover more about our solutions and give your ERP the much-needed boost that it deserves.

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HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.