Boon or Bane: Are ERP Solutions for Manufacturing Industry Impacting the Business?
Enterprise Resource Planning (ERP) software, in theory, should provide businesses with a suite of integrated applications that can provide a continuously updated view of core business activities. And while the concept of ERP arose from a common manufacturing core, today’s offerings incorporate finance and accounting, maintenance, and human resource components.
However, businesses growth, needs change and technology moves on. And this often means that what once seemed like a good solution can no longer deliver necessary functionality – or worse, it’s actually started to create problems for your employees.
But how can you recognize when an ERP solution has failed in delivering its promised benefits?
Here are some of the key warning signs:
- It was never configured for your company
- Your ERP has stopped receiving regular updates
- You can no longer find IT or vendor support
- Users are adjusting business processes to suit the ERP system
- People are creating work-arounds outside the ERP system
- It’s simply no longer cost effective
Learn the implications of these warning signs, when ERP for your manufacturing business can backfire
It was never configured for your company
Companies often start with a store-bought ERP solution that may offer basic key functionality – but like any one-size-fits all solution, it won’t necessarily be able to meet all your company’s goals and objectives.
In our experience, many of the ERP solutions we implement for our clients provide them with maybe 60-80% of what the need out of the box. And while that’s an improvement over nothing, that last 20-40 % is critical to build a solution that can actually streamline your business and improve efficiencies.
If your ERP solution was never customized to your company’s specific needs, it’s likely creating unnecessary work (discussed below) and introducing friction.
Your ERP has stopped receiving regular updates – and doesn’t speak cloud.
As technology becomes more interconnected and software increasingly moves to a SaaS model, legacy products are often at risk of being phased out. If your ERP system hasn’t received a significant update in the last few years, you’re at risk of being left behind as functionality (not to mention security) moves on without you.
Integration with common cloud services, mobile access and scalability are becoming increasingly essential to modern businesses, and hanging onto legacy ERP systems means you risk being dragged down with them as support is phased out.
You can no longer find IT or vendor support
We spoke earlier of customizing ERP solutions to meet your business needs. And if this was done off the bat, congratulations. Unfortunately, sometimes the customization process was iterative and ad-hoc in nature, and the staff who made the changes may have moved on, taking their knowledge with them.
When your ERP has been modified beyond recognition and you can’t find anyone who understands the system or the changes that were made (and why!), a fresh start is often the best solution.
Users are adjusting business processes to suit the ERP system
The whole point of an ERP system is to integrate your company’s best practices to reduce labour, automate back-office functions and give you an edge. But if your ERP software lacks the flexibility to incorporate new procedures and processes, you may find your users resorting to labourious processes to meet the limitations of the software.
If your ERP is forcing users to stick to obsolete processes and fiddle with data formatting just to ensure functionality, it’s a clear sign that you should look into an upgrade or replacement. Otherwise, you’ll see your competitors move ahead with more efficient processes and advanced technology.
People are creating work-arounds outside the ERP system
This is a big one that our clients frequently encounter – the limitations of inflexible legacy systems can drive people to use other programs, databases, and spreadsheets to address new processes, product lines or reporting needs.
This generates isolated pockets of information (siloes!) that often cannot be included in ERP reporting, which creates blind spots and liabilities for business. An ERP system should be able to provide an accurate reflection of your operations. If people are opting out of using it in favour of work-arounds, then it could actually be costing you money and time.
It’s simply no longer cost effective
If your ERP solution hasn’t grown and developed to match your business needs, the original cost-benefit calculations are likely out of date. With many key IT functions moving away from CAPEX to OPEX, modern cloud solutions are often cheaper (and more flexible) than legacy solutions.
However, price alone should not be your primary criteria when selecting an new ERP solution. Consider not only the costs, but the user interface, connectivity, support options, flexibility and ease of deployment.
Accelerate & streamline your business with Discovernet ERP implementation & support
At Discovernet, we are ERP-agnostic, and have helped a number of clients customize and deploy ERP solutions from a variety of vendors including Oracle/Netsuite, Progress, SAP, Spokane Computer and more.
Our experience and expertise can accelerate ERP deployment and help you start realizing benefits sooner. In one instance, we configured, deployed and optimized a pre-selected ERP for a national heavy equipment fitter with multiple branches within 6 months – when they had estimated a 24 month process.
If you are looking for an IT solutions partner for your manufacturing firm who understands your business needs and challenges, Discovernet is the answer. With almost two decades of experience in providing managed IT services and CIO-level support to leading manufacturers in the Greater Toronto Area and beyond, we provide an unmatched level of experience, insight, and customer service.
Want to learn more about building an ERP for your business? We’d be happy to discuss options!