Is it Time for a New Manufacturing ERP System?

Sometimes the case for buying a new manufacturing ERP system or replacing your existing one is clear. Other times it’s not. There are reasons you might not upgrade. Let’s look at those first.

The manufacturing ERP system still offers the flexibility and functionality you need

Regardless of its age, your ERP is still serving your business needs if you aren’t often buying new software to plug the gaps in its functionality. Also, if you don’t have an ever-growing feature wish list, count yourself among the lucky.

Your current ERP is reliable

Some vendors want you to believe once a piece of software has reached a certain age, it has outgrown its useful life. That is not true. Once again, age alone is not a reason to replace the system, if you and your team can count on it day in and day out, and the hardware it’s running on is also working without interruption.

Your ERP costs are still affordable

Many times, as ERP systems age, their maintenance costs increase exponentially. This is especially true if the system runs on older hardware that becomes harder and harder to source or it uses an obsolete programming language few developers know. Then, any time you need to replace a piece of hardware or change the software code to fit your current needs, you’ll wind up spending exorbitant amounts of money. If this happens repeatedly, the cost of maintaining your system becomes much higher than replacing it. Still, assuming your system runs well and meets your needs, maintenance costs alone also are not a reason to replace your current accounting or ERP system until they outweigh the cost of implementing a new system.

If all three of the above attributes describe your current your system, and there are no other glaring issues with it, you’re likely safe to hang onto it for a while longer.

What if these don’t describe my current accounting system or legacy manufacturing ERP system?

Chances are, if you’re reading this, you’re like most small and medium sized manufacturers who at some point find themselves in a less than ideal situation with your current software. You might think you’re saving money by putting off your upgrade. But this is a shortsighted view which ignores the many lucrative opportunities passing you by each day you cling to outdated systems.

Here are just a few of them:

• 24% increase in on-time deliveries
• 2 to 10% revenue growth year-over-year
• 1 to 5% gross margin growth year-over-year

Crunch the numbers. It’ll soon become painfully clear just how deeply holding onto an outdated system can affect your business. Often, the money you save in new licensing and implementation costs is insignificant compared to what you’re losing by overlooking opportunity costs like these.

And that’s just the beginning. To learn the many other ways your current entry level accounting system or tired legacy ERP is chipping away at your business’ bottom line, read our latest eBook, “12 Telltale Signs You’re Ready for a New Manufacturing ERP System.”