Considerations for Modernizing Your ERP
For many businesses, ERP is the backbone to system operations. Modernizing an ERP involves transforming a business’s legacy ERP system into a cloud-based platform to utilize the full potential of cloud, AI, and real-time data. When organizations choose to modernize their ERP, it enables agility, integration, and insight, which can lead to enhanced efficiency and better decision-making. In this piece, we will discuss the benefits and considerations that come with modernizing your ERP and map out the steps your business should take when deciding to modernize.
Why Should You Modernize
There are many reasons businesses should modernize their ERP systems. For one, organizations can experience inefficiencies when working with a legacy system. Many legacy systems have outdated user interfaces, fragmented data, and require manual workarounds when the legacy system’s functionality doesn’t meet the organization’s needs. Even organizations with relatively modern ERPs can find opportunities to improve performance with a newer ERP.
ERP modernization offers numerous benefits to the business. With a modern ERP, organizations can take advantage of native enhancements, like embedded AI, flexible integrations, and faster data processing. Modern ERPs offer many cloud-based, AI-powered solutions that can deliver faster and more reliable results. For example, AI embedded in modern ERPs enable capabilities like predictive analytics and scenario planning.
An up-to-date ERP is essential for businesses to maintain a competitive edge.
When to Modernize Your ERP
There are some key markers businesses can look out for when deciding to modernize. One of the first signs your business needs to modernize their ERP is when there is not a single enterprise-wide platform. In some cases, data may be separated across departments, or some organizations may use multiple ERPs across the company, as branches in different countries use different platforms. Modernizing your business’s ERP can provide the opportunity to consolidate data across systems, making future decision-making faster and easier.
Delays in visibility and a suboptimal user interface that result in slowed down operations and efficiency can also contribute to the need for a modernized ERP to resolve these obstacles. Additionally, businesses may need to modernize their ERP if they are starting to rely on workarounds – for instance, a business using spreadsheets or third-party tools to solve problems that the ERP system should be able to may need to modernize their system.
Benefits of a Modern ERP
Modern ERPs offer businesses tools that streamline processes, improve data visibility, and overall improve the efficiency of business processes. For example, modern ERPs offer AI-powered predictive insights and assistance to help deliver more accurate results at a higher speed. Overall, modern ERPs provide higher flexibility and speed for their users.
Modernizing a business’s ERP also gives them the opportunity to unify data across the business. This allows for faster data sharing and increased data security. Consolidated data can provide real-time, more accurate insights. Well-organized data is also critical for getting the most effective insights out of the AI embedded in modern ERPs.
Steps Toward Modernization
As your organization prepares to make the decision to modernize your ERP, there are some key steps you should take.
- Assess your current ERP system’s performance and business needs.
- Define your business’s goals for modernization, such as:
- Efficiency
- What insights you want to see
- Scalability
- Build the business case.
- Choose the right ERP vendor, implementation provider, and implementation approach.
- Finalize business case for budget approval.
- Plan for change management and adoption.
Final Thoughts
ERP systems should be treated as a strategic asset for improving business processes. By assessing your current ERP system’s performance, identifying inefficiencies, and defining your business’ goals for modernization, you can determine if modernization will be beneficial to your business. With a well-planned approach, ERP modernization can be leveraged to elevate an organization’s efficiency and scalability.
If your organization is looking to modernize their ERP and needs help getting started, our team at Clarkston can help. Click here to learn more.
Subscribe to Clarkston's Insights
Contributions from Natalie Pollock
