ERP - Question the Need for ERP System Modernisation or Upgrade

ERP - Question the Need for ERP System Modernisation or Upgrade
(CopyRight 2009; Benjamin Goh, www.bensglobal.com)

The need to modernise the existing Enterprise Resource Planning (or Supply Chain Management) system only comes with the need to be more competitive in the marketplace. Its a business question, rather than a technology question.

For example, would it be necessary to upgrade our Microsoft Windows operating system every single time Microsoft launches a new version? My answer is no, if the existing version does its job for our work and business, that is, compatibility with majority of our important business partners (customers and suppliers). Well, the 80/20 rule. If we can continue doing business with our major customers and suppliers as well as future highly potential new customers and suppliers, why upgrade and incur additional cost in software implementation and employee re-training.

Similarly, this applies to the enterprise software! Software implementation and employee re-training are major costs to a company (whatever the size of the company) and if it is not managed well, it could literally drag the entire company down with business disruption, etc. Further, the cost of communicating this change to our business partners and/or the market as this will definitely have some or major impact on them.

I fully endorse the need to spend much more time in the initial stages; as in planning and determining the exact requirements of the enterprise software system prior to purchasing. Planning should not be limited to the current need but it should encompass the future needs and competitive trends of the marketplace. Bottomline is that it should be a system that further enhance the existing core competence of the company.

Further, before any thoughts about upgrading or replacing the existing system, always ask if we have fully exploit the existing system to the fullest and/or if all our staff are thoroughly familiar with all the features and functions of the system. In my experience, I find many users not using all the functionalities of the system due to lack of training as a result of staff turnover.

In conclusion, let me share the following using the words, ERP:

E for Exploit the existing system always; ensuring resources are fully and adequately trained at all times to fully exploit all the features and functions of the existing system.

R for Review the business requirements regularly; encompassing the future needs and competitive trends of the marketplace.

P for Plan, plan and plan first; ensuring that sufficient planning and research are performed before embarking on a new system. A new system must always be better in enhancing the core competence of the company after taking into consideration the cost of system modernisation, resource re-training and market communication.