When’s the best time to replace your ERP? Ask any business leader that question and the likely response will be “never.” There’s always another project on the priority list, resources are scarce, and budget dollars are hard to come by.
Many organizations have invested in customizations to extend the functionality of their ERP, but customizations are expensive to maintain and can’t keep up with the demands to integrate and streamline workflow for people, information, materials and finances both internal to the organization and to external constituents. Recognizing that efficiency gains and operational improvements outweigh the pain of progress, many IT and business leaders are replacing legacy on-premise ERP systems and the major upgrade expense with more flexible cloud-based solutions that continually improve.
Cloud solutions give organizations the flexibility to accommodate any business process workflow, support collaboration, add new capabilities, and rapidly address changing requirements. How do you know if replacing your ERP with a cloud solution is right for your organization? Ask yourself if any of the following checklist applies to you:
Operating costs are high. If your hardware is old, software is no longer supported by the vendor and you are constantly modifying the application, cloud can reduce the total cost of ownership of your current system. For smaller businesses, making the move to cloud can deliver access to enterprise functionality at a fraction of the cost.
You can’t keep up with a changing competitive environment. Whether your organization has evolved quicker than expected or your business model has changed, you may find that your current ERP doesn’t support present-day business needs like mobile or social collaboration or integrate with other systems. Cloud makes it easy to acquire additional software or functions.
Information is hard to access. Is information stored in silos? Are people using spreadsheets to get work done? Are your staff finding it increasingly difficult to access inventory, supply and order status data remotely, and from a single source? Gaining access to information is one of the greatest benefits of cloud solutions, allowing business leaders to apply analytics to spot trends, control costs and improve margins using information that is accurate and easily accessible.
Aging hardware is unreliable and costly. Has support ended? Is maintenance no longer available? Has the hardware vendor gone out of business? Older hardware elevates risk, especially when support ends and maintenance costs increase. Additionally, turnover on the IT team may result in knowledge walking out the door and replacement staff with limited knowledge of any customizations.
Legacy software lacks modern capabilities. Industry analysts estimate that the average age of ERP solutions used in the market is about seven years old. A lot has changed in that time and not staying current can cause your organization to lag behind. In addition to technology changes, the business has likely evolved as well. Whether it’s new product lines, merger and acquisition activity or a new model of business, you can’t prepare for the future if your software can’t adapt.
Moving to the cloud can alleviate the worries associated with aging legacy systems and lets IT staff focus on the core task of delivering solutions faster to meet customer demand. If you’re weighing the decision to cloud or not, let Avaap help you determine if it makes sense.
Greg Benton is vice president of healthcare and strategic markets, responsible for helping customers leverage investment in Infor software to increase operational efficiency and drive the most value from the technology.