Intact Insights | Blog

The Red Flags You Should Look Out For in Your Outdated ERP System

Written by Catherine Cane | 01-Aug-2024 09:02:23

It's important to have current information on your operations in this fast-paced business world. This will help you make smart decisions that support the growth and profitability of your business. However, outdated, legacy ERP systems may hinder you by providing limited visibility.    

Organisations can no longer afford the high costs associated with legacy ERP platforms, making upgrading to a modern, integrated ERP solution an imperative for sustainable profitability.   

The cost of ownership  

Beware of suppliers who charge extra for maintaining old software versions. First, it may be a tactic to lock you into extended contracts, sometimes lasting 12 months or more. Alternatively, you might find yourself paying a premium for outdated, stagnant software.  This is basically a cash cow for your provider.  

Sometimes, it’s easier to pay these premiums because you can ‘make do’ with your current software for a while, but this short-term mindset can be costly in the long run. For example, outdated inventory software can lead to inefficiencies in stock control and order processing, ultimately costing you more in time and resources. 

While the software at this stage doesn’t owe you anything, the return on investment can quickly diminish as the world moves on and your software remains stagnant.   

This can make the total cost of ownership for your current system unsustainable, and it's often more cost-effective to invest in a modern, up-to-date business management solution.  

 

Losing sales and loyal customers   

An inadequate business management system is a major contributing factor to missed opportunities and often business failure. It's hard to create effective marketing campaigns that boost sales without access to important customer data and buying insights. 

ERP systems have improved to offer a smooth, connected platform for overseeing your sales process. This includes tracking customer interactions, monitoring sales progress, calculating margins accurately, and managing post-sale customer service. Modern solutions excel at saving time in critical areas like order processing and trade counter operations, especially important for businesses dealing with building supplies. 

The key advantage of this is that it brings together the sales cycle, operational processes, and business intelligence in one place. This empowers staff across all departments to collaborate closely and share information in a timely manner. The transparency and cross-functional coordination allow organisations to operate with maximum efficiency, improve customer satisfaction levels, and maintain a competitive edge.  

A comprehensively implemented, well-designed, tailored system suited for your industry is essential if you’re aiming for sustainable growth.  When implemented and utilised correctly, a modern ERP platform enables you to maximise returns from your marketing efforts. It allows you to fully capitalise on every single sales lead and cultivate long-lasting relationships with both new prospects and established customers. An optimised system translates directly into improved sales performance and great customer experience!   

 

The analytical benefit   

Older systems are often full of information that can’t be accessed without significant investment of time and energy. Lack of visibility can lead to issues in a drop-off in customers for products, product groups, or categories. As well as poor stock management, customer retention and customer service levels. 

Sound familiar? Well, this can cause frustration for the decision makers in your company. If you don’t have the correct live end-to-end data, you don’t have the correct information to make the right decisions.   

Information transparency and controls empower well presented, easy-to-read, and easy-to-understand real-time interfaces that allow them to make proper decisions. When combined with your control desk (a visual representation of your key performance indicators), you can produce workflows for situations where customers have had no contact in 30 days or customers whose last sale date exceeds a certain threshold.  

Staff Workarounds!   

If your software can't do everything from start to finish, you might end up with extra steps, repeated tasks, and mistakes. This can lead to more problems and errors in your work.   

If you’re doing workarounds, you’re bypassing the rules of business or the processes that you want to instil. This can be the driver for your customer service levels, stock management controls, pricing, and margin maintenance. When you’re using multiple disparate systems, it means you’re losing a level of end-to-end transparency. Controls and leads to manually policing system activity.   

With older ERP systems it’s often the case that you need to buy bolt-ons and ‘sticky plaster’ solutions to overcome the limitations of the platform you’re on. These systems can prove costly in terms of ownership, and they can also incur high costs due to the lack of real-time integration.  

With older technology, you may end up only using a certain percentage of the system, and eventually you use less and less over time. A modern ERP solution gives you end-to-end control, prevents duplication, and frees up your team's time, allowing them to focus on their core responsibilities.  

It also gives you the ability to scale up or down your system as your business needs change e.g. adding or subtracting users, taking advantage of new features and modules that improve productivity and more.  

 Ageing technology supressing innovation   

Is your outdated legacy ERP system holding your business back? In today's fast-paced environment, agility is key to maintaining a competitive edge. However, you may find yourself juggling disparate systems and workarounds, with employees performing critical processes outside the core ERP software. This is a clear sign that the system is preventing growth rather than enabling it!   

Your business processes should separate you from your rivals, but legacy ERP solutions are often too rigid to keep up with technological advancements, which can hinder your competitiveness. This is especially true in specialised fields where, for example, building and plumbing merchant software need to be adaptable to industry specific requirements.  

In the past, customising ERP systems was extremely complex and resource intensive to the extent customisation was almost a dirty word. Modern ERP platforms, such as Intact iQ however, are built on flexible, open architectures that allow for intuitive customisations aligned with your specific needs - without disrupting your core system or impacting on future upgrades of the standard system.  

 

 

Mobility and remote work capabilities are now essential for driving productivity and accelerating decision-making. Attempting to retrofit outdated ERP software with mobile features is a costly, complex effort. In contrast, today's leading ERP solutions embrace mobility from the ground up, empowering a dispersed workforce, boosting profitability, and enhancing customer satisfaction.  

How many parts of your day job do you do outside the software?   

At Intact, we strongly believe in using one software system for all your operations, where information automatically becomes available across your entire company. This includes everything from stock levels, replenishment rules, reports, and more - all accessible in the same centralized system. This means everyone is empowered to make accurate and up to date business decisions based on real, live information, rather than having to manipulate and use other platforms for data analysis.  

Most businesses running on old or outdated software systems will almost always benefit from, and save money, by conducting a review of their current processes and implementing or upgrading to new modern ERP systems. However, it can be hard to see this as an opportunity until it’s already cost a significant amount of money. 

If you don't see the advantages of a new system, it's usually due to bad setup and implementation methods. We always say, it's just as important to consider future needs as it is current.   

Look at the technology in use; is it outdated and creating limitations? Or is it new and progressive, creating opportunities? 

 

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