An organization implements an ERP system after investing a lot of efforts, time and money. Replacing a current ERP system is a tactical move.
An organization implements an Enterprise Resource Planning system after investing a lot of efforts, time and money. ERP brings about a lot of changes in the workings of the organization and it takes time and training to switch to the new system. So why do organization replace their current system and when should organization replace their current ERP software? This takes place when there is scope of improvement and a chance of an improved Return on Investment or ROI. There can be various causes which lead an organization to replace their current ERP software such as better software quality, upgrades, easier management, new acquisitions, etc.
Some of the reasons for the replacement are as follows:
- Problems with present ERP system: The organization may be facing problems with the current Enterprise Resource Planning system due to unsuitability. The system may not be suitable to the business environment causing difficulty in the business processes. This may increase with time and it may be time the organization replace their current ERP software.
No support: Some ERP software do not support implementation of other software applications that are useful for the organization. This may be of disadvantage for the business making the organization replace their current ERP software.
Acquisitions: Organizations are acquiring smaller companies and competing in the market. If new acquisitions have been made, there can be change in the business environment due to change in strategies. This may lead to a replacement of the current ERP system.
Management issues: The current system may be getting difficult to manage. It may be very time consuming and involving a lot of money.
Old features: The current system may not have the new features and technical advancement. The organisation may want to be up to date in the market and not stuck with old features. It may want to switch to a new ERP system to include the latest technologies to improve its business and have a competitive edge. This could be a reason when organisation should replace their current ERP software.
New Requirements: As an organisation expands, it may have new business requirements which are not taken care of the current ERP system. The organisation may look at expansion too which demands new requirements and latest technologies.
These could be the reasons when organisation replaces their current ERP software. The implementation may start with lot of anticipation but not give the desired results. The replacement decision usually comes from the deficiencies in the current system which results in dissatisfaction. The ERP system may be providing lot of data but not the apt information which the organization needs. It may not match the current business processes creating gaps. The underlying infrastructure may no longer be supported by the concerned vendors or keep up with the changes. All these reasons may indicate that the organization has outgrown the current ERP software and it is time that the organisation replaces their current ERP software to improve their business processes and keep up with the times.
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