Reasons to be cheerful part 1

Or at least plan an upgrade to make the most of what you have – reasons to be cheerful Part 1 – Update or Upgrade? 

 

The last few years has seen businesses taking longer to make decisions but those that adapt, and transform will be able to respond to change and to take advantage of the eventual upturn. Mitigating against the risk of uncertainty shouldn’t see you stagnate because an agile business will always have a greater capacity to make money. And a sound business prepares by ensuring they are optimised; spending on performance products or enhancing those already installed. 

 

It may seem like a disadvantage that these transformation projects touch every aspect of your business, (and so it is good to be aware that your employees may be resistant at the beginning), but more importantly it is an opportunity to put every aspect of the business under the microscope to ensure processes are optimal.

 

When a transformation project is properly communicated and inclusive, it can bring immense business benefits across the organisation and see everyone striving towards increased performance and efficiency. 

 

When considering your ERP options, bear in mind that there is a vast difference between an update and an upgrade. Updates are smaller changes made to existing software, (although these can still have a significant impact and be disruptive, but you will also all witness improvements in the business). Updates can even impact system navigation and the user interface; suggesting some training may be appropriate (which is a great opportunity to insert a little motivational training and company ethos and cultural reinforcement). Again, accentuating the positive, as the update will invariably include some bug fixes and an increase in functionality. 

 

In contrast an upgrade is likely to take the form of a major software overhaul, with a new look and new features (even making some previous functions obsolete). While updates are usually free, software upgrades can be costly and may require hardware upgrades as well as expertise to assist with the process. This may be the time to assess what is right for the business from an infrastructure perspective; is now a good time to review cloud versus on premise or some form of hybrid? 

 

So, properly prepare, set expectations and invest both time, money and the appropriate resources in evaluating which is best for you. Some other things to consider is how your incumbent ERP vendor has performed over the years. Has the product moved forward compared to industry average and does it still offer the best solution for your industry? And fundamentally have they responded and offered a good service; directly or through your delivery partner? 

 

The considerations of updates and upgrades are important phases in the life-cycle of your ERP system and some of these points should be fully explored; 

 

 

Some vendors stop providing support for their “legacy” versions and in such cases, upgrading your ERP software becomes a must. 

 

In an ideal world there should be a clear benefit for investing in a new system or performing an upgrade and the ROI needs to clearly outweigh the cost. There should be a clear financial benefit as well as other non-financial benefits. These may take the form of greater efficiency, better utilised staff, more satisfied customers, better supplier relationships, improved reputation and better customer service. 

 

In essence, you need to legitimise the investment.

 

 

With a typical lifespan of well beyond 10 – 15 years, the ERP system allows an organization to manage and automate many back-office functions related to technology, operations, services and human resources. The benefits of streamlining and integrating all aspects of business operations can last for many years but in order to ensure that these benefits continue, it is important to re-evaluate the business processes that sit behind, to see if they need an “upgrade” as well. 

 

Without performing regular reviews and upgrades, the lifespan will be significantly reduced. Ideally your ERP system is customisable so can adapt to your changing business needs but at some point, all businesses need to transform due to market pressures and a proper business transformation project is needed to support this. It is this review of the business processes that is likely to see if your current ERP is fit for purpose.   

 

 

In all but the simplest ERP implementation, one of their key attractions are that they are customised for each new instance to ensure the system maps to a company’s way of doing business. It is this mapping process and the resultant needs analysis (or requirements list), that will dictate the most suitable ERP solution for your business. However, market conditions change, and the ERP needs to be able to reflect those changes and “bend” to the will of the business. At this point the system should be reconfigured to the new, or slightly adjusted, goals of the company before continuing along with the strategy. If this is not possible then a reassessment is required, needs realigned and a new system considered that reflects the new short and long-term goals and business processes in the business.

 

To remain competitive, control costs, deliver goods, analyse trends and respond to customer demands a business needs to be streamlined and efficient from production through to delivery. Any ERP decision needs to support a company’s competitive advantage.

 

 

In most businesses everything comes down to the bottom line and never more so than in the current economic climate. Efficiency is invariably a key KPI (key performance indicator) and one that should be measured in terms of the benefits brought by the ERP system. These KPIs are important and setting them, tracking them and responding to them, makes for a more proactive, responsive business.

 

Responses may dictate a reduction of costs or a change in product type to meet customer demand. But, when quantifying the effects of upgrading your ERP system or keeping your operations as they are, your company can make a cost-based decision that align with your budget and strategy remembering that long-term costs of ERP systems can be kept under control by performing periodic updates. 

 

 

In business today, it is all about the cost of doing one thing or another, rarely can businesses afford to do everything on their radar. Which makes it essential to have a full cost analysis to help you decide if you should be updating or upgrading your ERP software. Bearing in mind there may be additional benefits, as technology has moved on at a pace, and there may be newer tools that incorporate AI and IoT that can justify the investment or you may enjoy other benefits such as increased communication or better visibility of day-to-day operations in addition to the expected increases in efficiency. 

 

What do they say; Go Big, Go Niche or Go Home.

 

Being timid in business simply isn’t an option. You need to streamline, increase efficiency and maximise performance to be able to react to business opportunities and be competitive. But also remember to “stay in your lane” and focus on where your business excels; bringing in partners to help where they have the skills. 

 

Making important technology decisions that will shape the coming years may need an independent set of impartial eyes – some help in the form of technology consultants who understand the technology as well as the business processes. Professional consultants who assess transformation solutions day in, day out, can perform a full evaluation of updates versus upgrades and the necessary frequency of both. They can assess all the business processes and help frame the technology that will contribute towards a well-functioning, money-making business. 

 

For more information please see www.reinforcetech.co.uk

Or enquire to info@reinforcetech.co.uk