CFOs understand the importance of having efficient systems and accurate financial data to drive favorable business outcomes. But amid numerous competing initiatives, it’s hard to know when the time is right to evaluate a new ERP system.
But the good news is you can proactively prevent business performance disruptions by familiarizing yourself with common indicators that your existing ERP is causing problems. Here are five key indicators:
- Inaccuracies in your KPIs and financial reports
Manual processes, disconnected systems, and repetitive tasks often lie at the root of these issues. By implementing a new ERP system, you not only have the opportunity to cleanse your data but also automate workflows, leading to more reliable and streamlined financial reporting.
- Insufficient security features and outdated software
Legacy ERP platforms may not be fully compatible with modern security tools and tech stacks. As technology continues to evolve, uptime and security of financial data become bigger risks for businesses operating on legacy ERPs.
- Misalignment with growing business requirements
As your business grows and evolves, your ERP should adapt to the changing landscape. Increasing transaction volumes, expanding product lines, and plans for additional locations and/or acquisitions are indicators of future system bottlenecks that may be removed with a cloud-based ERP platform.
- Compliance risks associated with legacy systems
Legacy systems often introduce unnecessary compliance risks. Many of the latest ERP systems are deployed in the cloud, which shifts some of the burden of compliance to the hosting provider. More importantly, it frees your people to focus on tasks more strategically aligned to business growth.
- Employee morale and job satisfaction
Employee morale and job satisfaction can suffer when employees are constantly hitting roadblocks or do not feel that they have the tools to successfully do their jobs. One of the biggest things we hear from clients using legacy systems is that it is difficult, time-consuming and costly for their teams to extract and analyze data. Team members empowered to make decisions and generate valuable insights are more engaged. This reduces your costs to onboard and train new people, and it also reduces recruiting costs.
In a rapidly changing business climate, simply waiting for these issues to make it to your desk and taking a reactive approach to resolve them can result in unnecessary headaches and negatively impact business performance. Instead, finance leaders should proactively work to address these issues. Here are a few suggestions:
- Simply ask your employees if the ERP is inhibiting their productivity and whether they are frustrated with how the process works today. In the same conversation, find out what is working well because this is equally as important.
- Take an inventory of how many systems your team uses to complete their daily tasks. Sometimes having multiple systems is necessary, but other times, it can point to misaligned business requirements and outdated software.
- Look at your GL. How many entries are compiled manually? This can make KPIs difficult to reconcile or even create. It can also point to misaligned business requirements and cause employee morale issues.
Recognizing the signs that it is time to consider a new ERP system is vital for CFOs and finance leaders overseeing companies with significant growth and financial targets. The scenarios mentioned above are all signs that your current ERP system may be hindering your company’s potential.
At Schneider Downs, we understand these challenges, and we are here to provide expert guidance and support in evaluating, implementing, and optimizing a new ERP system that aligns with your business objectives. Call us today for a no-cost, no-obligation Needs Analysis to determine if migrating to a new ERP is the best course of action.
About the Author
Mike Scalamogna is a Technology Advisory Manager with Schneider Downs Consulting Practice, who specializes in ERP Advisory services. If you are interested in speaking with him about your cloud strategy, please contact him at [email protected].
About Schneider Downs Technology and Data Services
Schneider Downs Technology Advisors are committed to providing value-added technology services and solutions to our clients. We strive to create an ongoing mutually beneficial relationship with our clients by focusing on client satisfaction, delivery of quality service and the continuous education and training of our staff.
To learn more, visit our dedicated Technology and Data Services page.
