Month: August 2020

Software demos suck. A scripted ERP demo sucks even more. They suck for everyone, irrespective of which side of the table you are on. While scripted demos reduce the transition for ERP buyers, they are not best suited to identify the right ERP software for your business. This article will help you learn why scripted demos aren’t the best and what you can consider instead.

What is a scripted ERP demo?

If you are not familiar with a scripted demo concept, it is one of the critical steps of the ERP purchase process to demonstrate the capabilities of an ERP system.

To prepare for this demo, your consultant might ask you to share a sample dataset that may consist of a set of items, customers, and vendors. They would use this dummy data and a few basic scenarios to configure a demo instance. This step would help align the expectations of the demo meeting.

How long is typically a scripted ERP demo and what it entails?

Typically a scripted demo could be between 4-8 hrs depending upon how much time you want to spend with each ERP vendor. During the demo, it is nearly impossible to cover each scenario in detail. Doing so might be overwhelming for your audience, especially if you are newer to ERP systems.

As part of these demos, ERP consultants typically like to cover only basic processes such as order-to-cash or procure-to-pay. Or they might show how to manufacture one of your products in the new ERP system.

Scripted ERP demos are a complete waste of time.

The scripted demos aren’t the best reflective of the capabilities of an ERP system as basic processes tend to be similar in most ERP systems. The critical differentiator among ERP systems is their planning capabilities.

With so many details thrown your way as part of ERP demos with each vendor, you are likely to be confused, and you might end up choosing a misfit ERP system based on the performance of the presenter or their understanding of your business. These factors are essential but not as critical as selecting the right ERP system for your business.

Sharing a sandbox could be a potential option and a viable alternative for scripted demos.

The frustration with scripted demos is not new. Due to the lack of alternatives, they are still widely used during the ERP purchase process. Some ERP vendors with smaller, prescriptive products have recently started sharing a sandbox to try their products. While this approach could be an excellent alternative for more straightforward products, it may not work for more extensive, highly customizable products.

The sophisticated counterparts require a bit of training before you could use them. Just because you are not able to use such products doesn’t mean that they could be any inferior or perceived as hard to use. It just means that you need to be trained in them. For some ERP vendors, this approach may not even be feasible as provisioning an instance and granting access to it could be highly expensive, and they might not be able to provide it during the sales process. You might lose on a fantastic product just because they cannot share a sandbox in this approach. Therefore, trying ERP systems in a sandbox is not a viable alternative for a scripted demo.

Collaborative demos are a more promising alternative to scripted demos.

With the advancement of remote technologies such as Zoom, a new pattern has emerged among recent customers with the request for a collaborative demo. A collaborative demo refers to a process where you, as a demo attendee, use the system while your consultant guides you using annotations (check #7 in this article if you are not familiar with the concept of annotations).

Your consultant would click each annotation to guide you where they want you to click. You would then follow it by actually performing that operation on a live system–similar to “assisted driving” in the real world. Irrespective of whether you prefer to meet in an in-person setting or virtual, this approach could be equally helpful. You don’t have anyone watching your shoulder as you are using the system but still getting enough guide sticks to maneuver around the system.

Isn’t a collaborative demo just a better version of a scripted demo?

A collaborative demo uses the best practices of a scripted demo, such as aligning the dataset and scenarios and the overall flow of the meeting.

The only difference between a collaborative and a scripted demo is that rather than you watching your consultant drive, you drive yourself with assistance.

How to make a collaborative demo successful?

For a collaborative demo to be successful and for your team to get an immersive experience, you need to ensure that most of your team members use the system in turn. So, they can compare how each of the systems feels, or maybe come back for more of these sessions to refine their understanding once they are through their initial comparison.

Our recent collaborative demos have been widely successful as the customers don’t have to sit through boring monologues for eight hours. The workshop-style collaboration encourages participation from your users and helps them better understand the concepts while appreciating the deeper capabilities of various systems.

Conclusion

A collaborative demo is an excellent replacement for a scripted demo. You can even argue that it is just a better version of a scripted demo. Collaborative demos can help you understand and appreciate the system’s capabilities better.

The best part about collaborative demos is that you will no longer feel that the ERP demos suck. They could be enjoyable if done right.

“The ability to learn faster than your competitors may be the only sustainable competitive advantage,” says Arie de Geus of Shell Oil. And the best way to assess whether you are ready for something is by reviewing your competitors, especially if you are unsure. This article outlines most scenarios when other businesses consider upgrading their ERP systems. It will help you explore your journey by learning from your competitors.

To prepare this list, we have analyzed a random sample of 45 companies from our client base. And their triggers of the need for an ERP system. This chart represents the results of that analysis. “Outgrowing current systems” seem to be the leading factor while “management changes” seems to be the second biggest factor.

Understanding these triggers and the core reasons behind them will help you identify opportunities for your company. One thing you might not want to do is to miss the opportunities just because of unawareness.

1. Outgrowing current systems

This seems to be the top reason why companies usually look for a new ERP. ERP systems are designed based on the size of a company, industry, etc. What are the major variables for selecting the right ERP system? How much planning would you need for your company, as ERP systems are primarily responsible for planning?

Installing an ERP for the first time? You may be aiming for the ERP upgrade to last the next 10-20 years. This is rarely true, though, especially if you are a growing company. Also, as you grow, the need for planning changes every couple of years. For example, a small company with a revenue of $50M? You will be overplanning if you plan like a large company with a revenue of $5B company. This planning may also be counter-productive.

Similarly, an ERP that is designed to assist with the planning of a large company may not be the best fit for a small company or vice versa. Every couple of years, your need for planning changes. And so does the need for an ERP system that is suitable for the size of your company.

Think of it this way, if you are single and the only reason why you need a car is to commute to work then Corolla may be enough. A truck may be overkill. However, if you are in a moving business where you have to carry heavy goods then Corolla may not be enough. As with vehicles, you need to choose the right ERP system depending on the stage of your company. And once you outgrow it, you need to plan the upgrade.

This is why companies outgrow their systems every couple of years and why this is a predominant reason for a switch.

2. Management changes

This is among the top two reasons for a new ERP project. Once a company hires a seasoned controller, CFO, or IT executive, they hire them as current management feels that their business has room to be organized and streamlined. These executives need to have the necessary experience to take the company to the next level.

For example, as the company grows, it might be pursuing several compliance certifications. Such as HIPAA or 21 CFR Part 11. As well as end-to-end traceability. Until now, they may have been able to manage the manual processes as they were small. Now management may feel that with growth, the manual processes could be inefficient and risky. And the executives will be responsible for automating these processes.

These executives may have worked for a larger organization and used a sophisticated ERP system firsthand. The goal is to use to get inspired by that experience and streamline the current business. This is why management change is the second most common reason for a new ERP.

3. Isolated systems with a lack of real-time information

While this reason could be thought of as similar to outgrowing the current system, this is listed as a separate item. These companies might not be growing as fast, but they might be operating on isolated systems. Such as QuickBooks or Sage as their accounting system. Epicor or Mysis is the manufacturing add-on, and there are a couple of Shop Floor and WMS add-ons. This architecture may be able to meet the needs of a small company with under $5M in revenue. It may be harder to grow afterward, however, as there will be significant duplication of data. And analytical work required to produce real-time data for their sales, operations, and finance teams.

The driver here is not necessarily the outpaced growth but it’s the architecture of ad-hoc systems. Real-time information across the processes is needed. An example of real-time information would be:

• Which inventory items are in the stock that the sales team can comfortably use to commit to the customer?
• What is the profit margin on each item that is being sold? And if there may be a product mix that might allow them to earn a higher profit margin without losing the sale?
• Which regions sell the products with the highest profit margin and which are the highest-grossing?

This information is typically gathered in the form of delayed reports in the case of the architecture of disconnected systems. With a fully integrated system, you can get this information with a bunch of clicks. Getting this deep insight is a huge value for a company that has never had access to such information. And this is why this is the third reason for a new ERP.

4. Startups getting ready for commercialization

Some startups might spend a significant amount of time in the R&D phase. For example, a new battery manufacturing technology company, a new solar panel, or a medical device. Once they are ready for commercialization, they will be in high demand by other manufacturers or distributors who want to take advantage of the new technology and commercialize the products before the market becomes too crowded.

The startup would need to ramp up its manufacturing capacity at a very fast pace and manage its fulfillment process. Startups such as these experience a significant amount of growth in their early years, and in most cases, they will be growing faster than their peers.

To manage this growth, they like to be on an ERP system before their commercialization and this is why this is another reason why companies look for a new ERP.

5. Manual processes, limited traceability, and overreliance on Excel

There are two groups of companies that fall into this category. Some of these companies could be traditional companies that’s been running like this for decades but with changing times they feel that they could be benefited by digitizing their processes. The other category of companies could be the smaller companies under $5M that never needed a system as they could manage their business on paper or spreadsheets until now but now it’s becoming unmanageable.

Both of these groups exhibit similar behavior in terms of their processes. Their processes are overly manual or they utilize spreadsheets to manage their end-to-end processes. These companies feel that they can’t grow with these manual processes or they feel that they could be growing faster if they didn’t have as many bottlenecks in their processes. This is why is also the reason why companies look for a new ERP.

6. The existing ERP was a misfit

Companies in this group would install an ERP, but the vendor or the consultant may have failed to understand the business of the company and installed the wrong ERP. For example, most ERP systems specialize in certain industries. They typically are cheaper in those industries and have lower implementation risks, as they have been proven there. Let’s take an example of the Acumatica ERP system. It specializes in certain industries, such as manufacturing, distribution, field service, and construction.

Infor CloudSuite Industrial (Syteline), however, focuses on very specific manufacturing industries such as Automotive, Electronics/Electrical Manufacturing, Aerospace and Defense, Medical devices, Windows and Door Manufacturing, and Industrial Machinery and Automation. If a consultant misunderstands the requirement of a distribution company and recommends Infor CloudSuite Industrial (Syteline) ERP for them, it would be a terrible fit as it is not designed for distribution companies. Similarly, if an ERP that has deep specialization in a specific micro-vertical will be far cheaper than a generalized ERP.

The reason why this is also a reason for a new ERP is that most ERP consulting firms specialize in only one ERP system, and sometimes it’s hard for them to know if they might be overcommitting with the only system they might be expert on. This is why it is important to work with a consulting firm such as ElevatIQ, which specializes in multiple ERP systems, so they can recommend the most appropriate option for you based on your business model and needs.

7. Homegrown systems too expensive or limiting

Since ERP engagements are one of the most intimate relationships where ERP consultants are likely to know most about their business, some companies don’t feel like working with these consultants as they feel that their business processes are unique and they don’t feel comfortable standardizing them and aligning them with industry-leading practices.

From our experience, we notice this issue only with smaller companies. Once a company grows beyond $30M in revenue, they usually focus on its core expertise and outsource other processes. For example, for a manufacturing company, volume or precision manufacturing could be their core expertise. Similarly, for a distributor, scaling their supply chain and optimizing their operations could be their expertise.

The homegrown systems are also not as agile as some of the modern cloud ERP systems such as Infor CloudSuite Industrial (Syteline) and Acumatica. They could also be very expensive. This is why these companies look for a new ERP system when their homegrown system becomes too expensive or limiting.

8. The current system going out of support or the publisher got acquired

This is also among one the chief reasons why companies look for a new ERP system. For example, Macola and Infor Point.Man are expected to go out of support very soon and most businesses that were on these systems would need to find a new home.

If publishers don’t have enough install base or not growing, they are likely to go out of business. This is why it is important to check the financial standing of the publisher. They might also get acquired by larger ERP players. For example, Point.Man was acquired by Infor. If this happens, in some cases, the companies that are acquiring may decide to kill the product and move to some of their other ERP systems, such as Infor CloudSuite Industrial (Syteline). Sticking with an outdated ERP may be riskier, and this is also the reason why companies are looking for a new ERP.

9. The modern systems are cheaper than maintaining the old one

This reason is similar to the homegrown case but the difference here is that you might be on another ERP system such as Microsoft GP or SAP Business One with significant customization by the reseller that may have become expensive to maintain over time due to hardware costs, maintenance, and upgrades required.

Cloud ERP systems such as Acumatica or Infor CloudSuite Industrial (Syteline) are far cheaper due to economies of scale and because the industry-specific functionality is built as part of the product.

The customized legacy systems may not have enough market share to provide the same economy of scale that publishers such as Infor can offer through their industry-specific editions and this is why this is also the reason why companies look for a new ERP to reduce their annual spend.

10. Significant changes in the habits of the workforce

Each demographic demonstrates specific habits. For example, older generations are not as tech-savvy and they might be fine with command-based legacy ERP systems. The newer generations, however, are used to modern technologies with intuitive interfaces on their mobile devices.

Most legacy systems such as Microsoft GP or Macola were not mobile-friendly as they were designed when mobile technologies were not as prevalent. The newer applications such as Acumatica were born in the age of cloud and mobile, and therefore, they provide a better experience to the users than legacy systems.

Companies that are going through a culture transformation such as hiring newer workers or tech-savvy workers or a pandemic such as COVID-19 might require the workforce to be enabled with mobile-friendly technologies, and this is why this is another reason why companies look for a new ERP system.

11. Material changes in the business model

Companies that are going through a business model transformation such as a manufacturing company pursuing direct-to-consumer or e-commerce capabilities, or a distribution trying to deepen in their value chain and may manufacture the goods themselves.

If this happens and if they might have an industry-specific ERP, they may need to upgrade it considering the new business model.

It may not be wise to buy a diverse ERP or an ERP considering the new business model if such a change may not be likely in the foreseeable future as it may be more expensive.

However, once these changes are in place, you may want to assess your revised processes and find an ERP that is suitable for the new business model. This is another reason why companies look for a new ERP if they have experienced a material change in their business model.

12. PE buyout

The reason why private equity may be interested in a manufacturing or a distribution company is that they feel that by optimizing the company’s process and by putting better management and control, they can improve the top or the bottom line, in the hope of increasing the value of the company in a specific period. The period for which they buy these companies could be anywhere from 5-7 years as they expect to exit after that.

To fix the process issues or to integrate or standardize with other companies in their portfolio, the companies might be interested in replacing their ERP systems and this is why this is also the reason why companies replace an ERP system.

13. M&A activity – acquired a new company or spun off one

Mergers and acquisitions are very common in the manufacturing and distribution industries. Manufacturing companies could acquire other companies to penetrate newer markets, capitalize on a technology or process, or for the economy of scale.

These M&A activities drive the need for integration and the integration might drive the need for a modern ERP that is slightly more integration-friendly. The other reasons could be similar to PE buyout where companies might standardize the ERP systems so that integration doesn’t become cost-prohibitive and it’s more seamless than a heterogeneous architecture would provide.

Conclusion

Now that you know a bit about the different triggers of why companies look for a new ERP. You might want to watch for these opportunities in your company and be faster than your competitors to gain a sustainable competitive advantage.

To the very least, review at least every year and decide if your systems might be ready for an upgrade.

Gordon B. Hinckley once said, “You can’t build a great building on a weak foundation.” Similarly, in the context of ERP systems, the “foundation” represents the financial stability of your ERP publisher, while the “building” symbolizes your company’s business continuity. This idea is straightforward, yet many businesses opt for potentially financially unstable ERP publishers without fully grasping their implications. In this article, you will learn why the financial stability of your ERP publisher is crucial and what could happen if you choose one that isn’t financially sound.

We have listed down the categories of publishers that would fall under these categories:

• A small publisher without inadequate market share to support ongoing development and maintenance costs.
• A well-known publisher that is operating at a loss in order to gain market share.
• A product that is not profitable but backed by a large, financially sound corporation.

When you implement an ERP system, you are relying on an algorithm that is developed and continuously maintained by the ERP publisher, even if you own the code in the case of an on-prem installation. The costs of this ongoing maintenance are typically shared by their customers. If the publisher lacks sufficient market share and existing customers are unwilling to pay more, the publisher may face financial difficulties. This could lead to the following consequences for you.

1. ERP products no longer supported

Much like cars or heavy machinery, ERP products are complex systems that should only be fixed by their publishers to avoid unintended consequences. If you’ve chosen a publisher that can no longer provide official support due to financial difficulties, your options are limited to seeking help from unauthorized consultants, which could lead to unpredictable behavior of your ERP system, or starting the implementation process all over again. To avoid this scenario, it’s best to steer clear of the financially unstable ERP publishers mentioned earlier.

How often do ERP publishers face cash challenges? ERP development is expensive and can drain cash flow. The frequency of these challenges largely depends on their cash reserves. As a general guideline, we recommend that ERP publishers with thousands of installations in the SME market to maintain financial stability. For markets with larger customers, this number may be lower.

2. Unable to provide regulatory upgrades

ERP publishers need to develop new features or update existing functionality to ensure compliance with changing regulations. If the publisher lacks the financial resources to support this development, you may find yourself out of compliance, potentially facing monetary penalties. When the Everest ERP system experienced financial troubles, its customers had to find a new solution to maintain regulatory compliance. You can avoid this situation by choosing financially stable ERP publishers.

3. Incompatible with underlying software or hardware

ERP products rely on various software packages and hardware components. For instance, Acumatica ERP is built on the .Net platform, which is owned and maintained by Microsoft. Each version of .Net is compatible with a specific version of Windows software, and Windows software may only work with certain Intel processors. Whenever an underlying component is updated, any dependent component must also be updated to maintain compatibility.

If an ERP publisher is not financially stable enough to support ongoing compatibility fixes with hardware and software, you may have to undergo the implementation process again with a different ERP publisher. Alternatively, the software could stop working suddenly due to compatibility issues, leading to disruptions in your business operations.

4. Chances of getting acquired

If an ERP publisher faces financial difficulties, they may need to secure an investor to fund development and maintenance. This investor could be a larger ERP publisher, such as Infor or Oracle.

When larger companies acquire smaller ERP publishers, they often use various strategies: 1) raise prices to recover ongoing losses, 2) discontinue the product and push you to switch to one of their own, 3) reduce support and other benefits you previously received, or 4) impose limits on storage or bandwidth, requiring you to upgrade. In any of these scenarios, you’ll either face higher costs or undergo another ERP implementation.

5. Inability to find consultants to get support on the product

Consultants prefer working with products backed by financially stable companies, as it minimizes risks to their careers. If an ERP publisher is facing financial challenges, you may find it difficult to secure consultants who can support the product.

6. Each of these risks has the following financial implications for your company.

1. Pay more than the agreed amount originally.
2. Lose investments on the original upgrade and might need to plan for a premature switch.
3. Forced to switch to an unwanted and expensive product in case of an acquisition.
4. Forced out of the platform if the product gets shut down by the acquiring company

Conclusion

ERP publishers provide the foundation for your business operations. Opting for a weak foundation, such as a financially weaker publisher, is not a wise decision. While you might save a small amount of money with these publishers, the financial risks involved could have serious consequences that aren’t worth the savings.

The market is flooded with dozens of outdated ERP systems (confusing to the extent that they use vendor names to refer to a product, as keeping up with millions of products is nearly impossible), including Macola, SAP R3/ECC, and Point.Man, as well as older versions of Syteline and Epicor. Legacy ERP products from publishers like Sage, IBM, Oracle, and Microsoft are also prevalent. These outdated systems span across various publishers and product categories. In some cases, the ERP publisher may no longer support these products or versions, or they may have even been advised to discontinue support altogether.

As the cost of supporting legacy versions rises due to a shrinking install base (having a handful of installations for a product isn’t uncommon in the ERP industry), vendors often employ various strategies to encourage customers to migrate to newer versions. In some cases, these warnings may simply be tactics to nudge you toward the version they prefer. However, not all publishers operate the same way. For some, the decision to phase out support is genuine, as maintaining these products or versions may no longer be financially viable. The install base may have dwindled to a point where the cost of upgrades and maintenance is no longer justified. Failing to understand the product life cycle can have repercussions. Consider the car market—what automotive manufacturer do you know that supports a car or model indefinitely? None, would you not agree?

Now that we agree most products have life cycles—and for good reason—it’s wise to embrace and evaluate the risks of using a product against the producer’s recommendations. Yet, that’s not always how life works, so why do businesses choose to stick with outdated software? There could be several reasons. Perhaps it’s the belief that the old software no longer incurs costs. Or maybe the memory of a difficult and disruptive ERP installation still lingers. Another factor could be the advice of a consultant who discourages upgrading. Finally, it might simply be a lack of understanding of the risks and benefits associated with upgrading.

1. No Official Support

Tip: If you are still lucky to have support from your publisher on the outdated ERP systems that you are using, you may want to skip this section and move to the next.

Some consultants may argue that lack of official support isn’t a concern, but support from the publisher remains critical. Why? An ERP system is essentially a black box, and only the OEMs truly understand its inner workings—or should be the ones addressing serious product issues. While you might find workarounds or apply temporary fixes, the long-term behavior of the system becomes unpredictable. These improvised solutions could have unintended consequences.

To put this into perspective, official support is like a manufacturer’s warranty or the support provided with a car. Sure, you might take your car to a local mechanic for minor repairs, even if they aren’t certified or endorsed by manufacturers like Honda or BMW. However, when a major issue arises—such as engine or transmission failure—the mechanic may not be equipped to handle it, leaving you without reliable support. You can’t afford to take such a gamble with financial software, which functions as the “brain” of your company. Imagine the consequences if your company’s brain were to malfunction.

2. Security Vulnerabilities

Outdated ERP systems leave you vulnerable to security risks because the core software is no longer being updated. Why is this a serious concern for financial software? Financial applications hold sensitive and confidential data about your company and its customers. If this data were to be compromised due to a security vulnerability, the financial and reputational consequences could be significant—risks that no business can afford to overlook.

To illustrate this, consider security updates like annual flu shots. Just as flu shots are a preventive measure to protect you from evolving flu strains, security updates protect your software from emerging threats. Each year, new strains of flu viruses are identified, requiring the vaccine to be updated—and the same principle applies to software. With official support from the OEM, they monitor new strains of computer viruses and security threats, providing regular updates to keep your system protected.

You definitely don’t want to catch the “ERP flu,” especially if you’re not accustomed to handling it. So far, your publisher has shielded you by providing preventive upgrades to keep your system protected.

3. Outdated Capabilities

Explaining or showcasing software capabilities can be challenging because, for many, software feels like a vast black box. Similarly, it’s not always easy to convey why the features you currently rely on might be outdated. A helpful analogy is to think about cars: you’d probably agree that driving a 1992 Nissan would be a vastly different experience compared to driving a 2020 model.

If we asked you to compare these two models, some casual users might point out that the design of the older model isn’t as appealing, or they might assume that the 2020 version is obviously better. On the other hand, those with a bit more technical knowledge might highlight differences in safety ratings, engine power, or transmission quality. Regardless of their level of expertise, however, both groups would likely agree that the 2020 model outperforms the 1992 version, offering enhanced capabilities due to technological advancements and improved design.

4. Expensive Consultants

In the consulting market, consultants are eager to work with the latest and most cutting-edge technologies, as it boosts their resumes. They aim to capitalize on emerging trends by becoming early adopters before the market gets saturated. The same logic applies to older products and technologies. When an OEM shifts its strategy, consultants typically move away from outdated ERP systems to avoid having their resumes become obsolete. Those who remain to support these legacy systems will likely charge significantly higher rates due to the scarcity of qualified experts.

There’s no way to avoid this; it’s simply how the talent market operates, driven by supply and demand. To avoid ending up in a tough spot, the best course of action is to upgrade your product as the market evolves. Otherwise, you could find yourself stuck with a 1992 car and a broken transmission, with only a few expensive experts able to fix it. The difference with ERP systems is that, while replacing a car carries minimal risk, the stakes are much higher with ERP systems. The risks include business disruption and potential financial loss.

5. Costly Upgrades and Maintenance

Older systems demand more time for troubleshooting and extended maintenance since they’re no longer being updated by the OEM. The reason people upgrade their cars isn’t just for prestige—it’s because maintaining an older car becomes more expensive. Maintenance costs can sometimes exceed the cost of purchasing a new one. ERPs are no different.

How many 1992 cars do you see on the road today? And if you don’t drive one yourself, why would you risk using outdated ERP systems? I’m sure you’d agree that sticking with such an old system is far from a smart decision.

6. No Mobile Capabilities

When older technologies were created, mobile devices were not as widespread, so they weren’t built to be compatible with them. In contrast, modern cloud software provides the flexibility to access your system from anywhere, on any device. This means you can have real-time insights right at your fingertips, along with the ability to manage your ERP from a mobile phone.

7. Frequent Outages

A 1992 car is less likely to be reliable and may break down frequently, and the same holds true for your ERP system. Since the software isn’t being updated, it’s prone to malfunctioning, and your consultants may take longer to fix issues because they might not be familiar with what’s causing the problems. This could disrupt your business processes, preventing you from fulfilling orders or generating invoices.

8. Hardware or OS Incompatibility

Even if your consultants manage to find workarounds for the software, it may not be compatible with newer database versions. This could lead to issues where the software doesn’t function properly with the latest operating systems or hardware.

9. Challenges in complying with regulatory requirements

Modern software typically updates automatically to reflect changes in laws and regulations, such as updates to PCI compliance, data security, new tax laws, and accounting rules. By using outdated software, you not only miss out on these essential updates, but you also risk facing significant fines for non-compliance with these regulations.

10. Customer and Employee Experience

Regardless of whether you’re a small or large business, today’s customers have similar expectations to those of Amazon when it comes to their experience. They value reliability and traceability with their orders, and they prefer to engage with businesses that are predictable and trustworthy. Using risky software, however, introduces unpredictability, undermining your ability to deliver with credibility.

The same goes for employee experience. Millennials grew up using mobile devices and social media platforms like Facebook. They’d rather work for your competitors than struggle with outdated, clunky software. With talent already being hard to find, you don’t want your software to be the reason you lose top candidates.

Conclusion

Switching from outdated ERP systems requires extensive planning, and to avoid being caught off guard, it’s wise to align your ERP upgrade process with current market trends. Skipping a model or two isn’t the end of the world, but driving a 1992 car is far from a smart choice.

Your first step should be to check if your current software is still supported by the OEM and explore your options if support has been discontinued. Independent ERP Consulting firms like ElevatIQ can assist with data migration and transition planning, helping you avoid potential issues down the road.