Legacy ERP system have their limits. Legacy systems no longer receive maintenance. Massive amounts of data overwhelm your infrastructure, preventing effective use for business intelligence. As a result, your company loses agility, workflow issues escalate, and you fall behind.
Start considering replacing or updating your current ERP system now. This guide explores the ERP lifecycle to help you stay ahead of the competition and determine if a change is needed.
Let me explain the ERP system lifecycle
The ERP lifecycle tracks how long a system remains in use. Studies show that ERP systems now have shorter lifespans. Given the time and money invested, it’s wise to take steps to extend your system’s lifespan.
The ERP system lifecycle consists of what?
The following is a general rule for ERP lifecycles:
- ERP rollout: After undergoing a thorough review, your selected program is initially put into action in the workplace.
- Optimization: business requirements have been taken into account when configuring the system. A process of personalization is part of this. This is to guarantee that a more efficient workflow leads to more production.
- Maintenance: daily maintenance of the system is what this entails. Making changes to tax values to meet legal requirements, reacting to user requests, and developing new reports.
- Extending values: while doing upkeep This necessitates adjusting to changes in business, government, and technology as they arise.
- Decaying performance: signaling the beginning of the system’s demise. Updating and maintaining it is a challenge. Demand is outpacing its ability to meet it.
- Reimplementation: on par with the first phase of implementation. Most companies, based on past experience, try to get by with a “vanilla ERP” that has all the functions they require. Time and money saved are a result of this.
People often confuse the system lifespan with the ERP installation lifecycle. However, the installation lifecycle refers only to the implementation phase, not the entire system’s lifespan. This phase typically lasts six to twelve months.
Assessment and choice
Prior to selection, the chosen system undergoes a comprehensive review. Typically, this starts with issuing ERP RFPs and continues with evaluating vendors. Part of this procedure is:
- Evaluate whether the vanilla ERP software meets your company’s current needs and how much customization it requires. This section highlights the effort needed to modify the source code. Key areas like accounting, management hierarchies, and core modules are usually mission-critical, so getting them right is essential.
- Additionally, assess the vendor’s financial stability and commitment. Reliable support and upgrades depend on the vendor’s strength, so conduct background checks and speak with current or former clients. Always obtain references, as the vendor plays a vital role during implementation.
- Clarify license fees and related costs upfront. Understanding the full financial picture is crucial to avoid surprises and prevent explaining to shareholders why cash forecasts fell short.
Check out our ERP selection checklist so that you may choose your ERP with complete confidence.
You may begin implementing your new ERP system once you have reviewed all of your alternatives and made an evaluation. Build a strong ERP assessment team. To get a complete view of your future ERP, you need input from end users, compliance, and maintenance personnel.
ERP system setup and performance enhancement
Initially, system deployment will bring challenges. Staff may feel confused, unsure of what to do, and ask many questions. Some software bugs may appear, along with typical teething issues.
The new system will likely require workflow adjustments, presenting both challenges and opportunities. After all, the goal is to improve workflows. However, unexpected disruptions may arise, so ensure the right people are available to resolve issues quickly.
If needed, modify the source code and thoroughly test the system to address any faults. Over time, accounting, core modules, and management functions will run smoothly, making the investment worthwhile. Ensure your vendor provides ongoing support to ease adoption and minimize lost productivity.
Within six to twelve months of staff training and vendor support, your ERP system should be fully operational, becoming the foundation of your business.
Ensure your vendor actively trains your staff trainers and provides support throughout the entire process. Issues will inevitably arise, and having expert help available will bring peace of mind.
Since this transition is significant, prepare for the unexpected. The success of the implementation largely depends on the vendors you select.
The key is to stay committed. Despite the challenges, a robust ERP system will prove well worth the initial investment.
Maintenance
Your company will rely on routine maintenance. New reports and further adjustments will require configuring after your staff assumes responsibility of your ERP. In order to adapt to changing company demands and new legislation, it will be necessary to develop new workflows and localize taxes. In an ideal world, this would be handled effortlessly by the system, eliminating the need to bring in experts.
It could not be easy, in which case you’ll have to change the code or get some outside assistance.
A license cost paid to the vendor is often partially covered by the service level agreement, which in turn requires maintenance. You can require the assistance of third-party providers for ERP system maintenance if the system is extremely complex. Your accounting system must take this extra expense into consideration.
It will take more time to manage a more complex system. It would be wise to stay away from this situation if you can. You would prefer not to have the system down when it might be supporting your business.
Keep in mind that the overall cost of ownership might fluctuate due to periodic increases in the licensing charge. Attempt to determine the appearance of something during the examination procedure.
Modular expansion is another factor to consider. Some modules that fall within this category include customer service and business intelligence. Until holes in the process become apparent, modules like this are frequently overlooked. It would be really helpful to consider this during the review process. The new modules may require changes to the source code once again in order to function properly.
It is necessary to apply accounting systems, new rules, system upgrades, and fixes. This may become an issue if there was a lot of personalization.
Not being able to adapt the modules due to lack of time or money might mean that the ERP system is about to die.
Decline of the system
Upkeep of the system will become prohibitively expensive and time-consuming at some point. Unfortunately, it’s becoming increasingly obvious that the system isn’t meeting business needs, and the complexity makes it unfeasible to continue upkeep.
Employees end up resorting to more and more creative solutions as a result. Either you have to install additional systems to make up for it or the system stops communicating with the ones you already have.
No matter what happens, the system clearly can’t meet the demands of the company anymore and needs to be replaced.
Modernizing the Enterprise Resource Planning (ERP) software
There are numerous similarities to the first launch. This is advantageous since it allows the company to gain knowledge from its first deployment. First, generic evaluations will be more tailored to company needs thanks to ERP experience.
Less customization and maintenance are subsequent outcomes of the technology being better suited to the company.
Not only does this save money and time, it also frees up your employees to focus on other initiatives. From a technical and training standpoint, the new systems should be implemented more quickly as well.
Concluding remarks
Think about the upkeep aspect while you’re evaluating a vendor’s solution. Having an easy-to-maintain system increases the ROI by extending the life of the ERP.
This is an essential component of any ERP system evaluation and should be given top priority.
End users, compliance, and maintenance teams should all be part of the ERP assessment team because of the system’s significance.
Get all of the modules up and running as soon as possible. Plan ahead and look at the big picture. Module implementation is simpler before deployment than after the fact.
Given the potential complexities of licensing, it is crucial to address this area in order to prevent unpleasant financial shocks.
You may greatly enhance workflow and return on investment (ROI) with the correct enterprise resource planning (ERP) solution.
