Don’t let an old ERP system hurt business

////Don’t let an old ERP system hurt business

Every manufacturer is likely running some kind of enterprise resource planning software. However, if ERP is too old or not up to business standards, it could be doing more harm than good for the organization. Industry professional Joe Alphonse wrote on Manufacturing Business Technology that many ERP systems struggle with complex initiatives, so businesses need to be sure they have an up to date system, such as Dynamics NAV, or they know where the shortfalls in their current software are.

“The inability to manage anything beyond basic incentives is significant, since many organizations rely on rebates and promotions to drive sales through channel partners,” he said. “However, ERP systems aren’t always up to the task: They’re unequipped to manage complex rebate programs, offer no visibility into incentive performance, and lack flexibility. These three gaps make implementing and managing effective incentives nearly impossible when solely relying on ERP.”

Alphonse listed some ways that older ERP programs can hurt an organization, such as having what he refers to as “vanilla rebate management.” ERP functions dictate the types of initiative an organization can run, so allowing old software to stay in control of promotions may be a big mistake unless it is an extremely modern system.

Another shortfall is limited visibility, something that can be a huge problem when trying to figure out how to grow business and measure how well certain aspects of the organization are doing. Alphonse said most ERP programs lack of the visibility needed. It may be best practice to adopt one that can work to help the company in this area, as he said 25 percent struggle with insight into performance. There can also be better flexibility with a program like Dynamics NAV in parcel.

“Updates are infrequent or rarely implemented, and new product models often require significant customization or extended periods of downtime,” he said of old platforms. “ERP manufacturers tend to only shift their programs when a critical mass of clients expresses a need for change, but even that can take years to maneuver through the ERP development cycle.”

Cloud may be the way to go
Forbes contributor and cloud professional Louis Columbus wrote manufactures are now under constant pressure to become more speedy, accurate and capitalize on intelligence better. However, it is increasingly difficult to do this with a legacy ERP program. Having the option for a cloud-based strategy may be a great way for these companies to move, as he said this can bring more unique intelligence and knowledge into every situation.

On-premise systems can also do this, but Columbus wrote that the cloud is far faster in regards to rolling out, customization and potential to increase adoption rates. One manufacturing manager utilizing a cloud solution said the speed of collaboration was so much better that problems that may usually occur were completely avoided.

Learn how to define your ERP strategy by downloading the white paper entitled “ERP in Manufacturing: Defining the ERP Strategy” from the DMS website today.