The Right Way to Invest in A New ERP Software

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SoftwareSuggest

Senior editor

Parul Saxena

Chief editor

Last updated: April 13, 2021

An ERP or Enterprise Resource Planning software is a tool that most modern organizations would find difficult to function without in 2018. The basic function of an ERP software is to collect, store, interpret and manage data from various business activities.

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It provides a continuously updated view of all core business processes, resources and commitments. In layman terms, it’s an all-in-one tool that organizations use in order to have a unified view of data and metrics across all business functions. Your business simply can’t do without it. It’s an integral part of most large enterprises and is increasingly becoming so even for the smaller and medium-sized ones. Without a well-functioning ERP system software, the day-to-day operations and activities of the business will be much more difficult to handle and monitor.

Your business could have had a trusty ERP software for a long time, but once certain signs of obsolescence start to creep in, it has to be replaced. In the event that this very necessary replacement does not take place, the business stands to suffer. There may be a multitude of reasons why your organization may need to change its existing ERP solution, some of which may include:

  • The existing ERP software can no longer handle the magnitude of business
  • It lacks an industry-specific functionality that your business cannot do without now
  • Regulatory compliance is not up-to-date with the old software

If your ERP is suffering from similar problems, it might be time to consider a replacement. But the process of choosing a new ERP solution has to be a systematic and logical one.

Factors to keep in mind when switching over to a new ERP software:

  • Evaluate Critical Issues with Old/Existing ERP Carefully

You should understand exactly why your business needs a new ERP system. The critical issues with the existing ERP software should be addressed first and foremost; these are after all, the reason why you’re going in for a replacement in the first place. If a thorough evaluation is not undertaken at this stage, several more threatening issues might arise in the future. It plays a significant role in choosing the most suitable ERP replacement for your business.

Also, read: What Should Retailers Keep In Mind Before Buying ERP Software

  • Be Forward-Looking

Don’t think of an ERP upgradation/replacement simply as a way to obtain the functionalities your present ERP is missing. Look at it as a long-term investment, and make your decision accordingly. Plan your purchase according to ongoing industry trends, but also consider the ways your industry is going to undergo changes in the coming years. Keep the future plans of your company in mind before settling on a new ERP software.

  • Data Organization

Proper data archiving and organization is important before the transition to a new ERP system. The data in your system should be cleaned and unnecessary data removed to ensure a smooth transition. If you are opting for cloud-based ERP, it is likely that it will have its own migration tools. So, someone familiar with both the old and the new systems should supervise the data migration for a seamless changeover.

ERP data organisation

  • Budget Constraints

In the search for the perfect ERP, do not go overboard and exceed the budget allotted for a new ERP. Shortlist the most appropriate ERP software for your organization, provided they fall within the budget allotted for the same. However, if you find that the requirements of your organization are not being met owing to budget constraints, don’t settle for a mediocre ERP solution that could potentially harm the company in the long run.

  • Security Concerns

A change in your ERP system will certainly be accompanied by some legitimate security concerns. As the system gets more expansive, so does its vulnerability to external and internal threats. Control to the system should be configured cautiously, and information to users should be made available on a need-to-know basis only. Your new ERP software should be up-to-date with regular security conventions and standards.

Bottom Line

These are some of the essential steps that a business should seriously take into account before committing to a new ERP solution. Every company, regardless of its size, needs to look into these parameters to choose the new ERP wisely.

For an organization, an ERP system is akin to its lifeblood. It is responsible for the handling of its day-to-day operations in every department. Hence the need to make a well-informed carefully thought out plan to migrate to a new Enterprise Resource Planning software. Ultimately, each enterprise would have specific issues with its existing ERP which they would have to address in particular. However, these steps are an appropriate baseline from which to operate while looking to replace your existing ERP.

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