In a perfect world, functionality and ease of use would be the top criteria manufacturers use when deciding to purchase, replace, or upgrade their Enterprise Resource Planning (ERP) solution. Unfortunately, in the real world, cost considerations rear their ugly head. Business leaders are concerned about the price of not only purchasing the solution, but also how much it will cost to implement, support, and maintain. Further, there is significant concern that an ERP implementation will cause significant disruption to the business, cause the organization to lose focus, or even “break” business processes that the company looked upon as core to their success.
It is common to hear horror stories of ERP implementations that have gone over budget and produced little ROI. For these reasons, often the choice made during an ERP selection process does not come down to the differences between a few solutions from a few different software vendors; rather, it comes down to either purchasing a solution or doing nothing at all. Far too often, manufacturers, particularly those in a growth phase, choose to do nothing at all and delay purchasing ERP to a later date.
While it is true that delaying an ERP decision will keep your organization from spending money in the short term, the productivity gains and business improvements that your business will miss out on far outweigh the costs. Working with old technology keeps businesses from taking advantage of modern solutions that provide more functionality and are easier to use. For businesses without ERP at all, there is no way they will be able to compete and support their growth without it. Without access to a modern ERP solution, manufacturers cannot support new business models and will not experience the improvements in Key Performance Metrics that come with a successful ERP implementation. This is why Aberdeen Group’s report “The Value of Upgrading ERP: Maintaining Modern Technology” found that Best-in-Class companies are 66 percent more likely to be implemented on the latest release.
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The author is Vice President and Managing Director, South Asian Subcontinent, Infor