Changing the ERP system will affect accounting, sales, inventory, and the daily work of employees. Therefore, it should not be a reaction to one slow report or a vendor presentation. First, clarify what is truly holding you back in the current solution and which processes are working well. A new system can improve, for example, inventory management, but it can also bring more work in accounting or data management.
1. The company has outgrown its accounting system
Accounting software, Excel, and manual records may suffice for a small company for a long time. The problem arises when key inventory, purchasing, and sales processes also start to take place in them. Employees then rewrite data between systems, maintain auxiliary spreadsheets, and search for information in documents. This increases errors and limits visibility into operations.
2. ERP cannot handle the growing volume of data
As the company grows, orders, documents, users, and inventory movements increase. A system that previously functioned without problems may start to slow down, extend closing periods, or fail during peak times. High demands are not only placed on large companies: an e-shop can generate a large number of orders, payments, returns, and shipping requests.
Before migration, also check the infrastructure and system settings. However, if you encounter its technical or product limits, it may be appropriate to replace the ERP or move some processes to a specialized application.
3. Important processes run in Excel or on paper
Excel is a useful tool, but it is not designed for managing an entire company. If production planning, inventory control, approvals, or claims tracking are conducted in it, the risk of errors and loss of oversight increases. Over time, it can also become difficult to determine which version of the file is current and who last changed the calculations.
The mere use of spreadsheets is not a problem. A warning sign is when a significant part of key business processes occurs outside of ERP.
4. ERP does not support the current needs of the company
A company can expand from wholesale to include an e-shop, retail, manufacturing, service, or custom modifications. Each change brings new requirements for pricing, reservations, returns, shipping, calculations, and reporting. If the ERP does not cover these, additional records and informal procedures arise, relying on the experiences of specific individuals.
First, assess whether it is sufficient to adjust the process, add a module, or create an integration. Sometimes the system just needs to be updated according to how the company has changed. If it cannot adequately support the necessary processes, a new ERP may make sense.
5. The system is difficult to connect with other applications
ERP usually needs to communicate with the e-shop, CRM, bank, carriers, cash registers, or analytical tools. Without a quality API or other standard integration options, connections become expensive and require individual adjustments.
Manual imports and exports increase the risk of incomplete or erroneous data. Sometimes an integration platform helps. However, if the ERP is closed and each new connection means an expensive project, a more open system may be more advantageous in the long run.
6. The supplier does not support the system or does not respond to requests
Without support, the company may miss security updates, bug fixes, legislative adjustments, and assistance during outages. There is also the risk of dependence on a single consultant or employee who is the only one that understands the historical setup of the system.
If key ERP knowledge is held by one person, their departure can jeopardize normal operations. Therefore, find out what support and system development options you truly have.
7. Operating ERP is too expensive
The acquisition cost and licenses do not reflect the total costs of ERP. Add maintenance, custom modifications, outages, bug fixes, and the time of employees who rewrite data or prepare reports outside the system.
A new ERP may not automatically be cheaper. However, compare the costs of the current solution with the price of its further development and the expected costs of the new ERP.
8. Data from ERP is not reliable
If sales, warehouse, and finance work with different data on revenue, margin, or product availability, management does not have a unified basis for decision-making. Causes may include duplicates, poor-quality codes, or data generated outside the system.
First, determine whether the problem is caused by the settings and processes or the ERP itself. Replacing the system will only help if the new solution can reliably capture the necessary data and the company establishes clear rules for their management.
9. Employees circumvent the system in the long term
Low user satisfaction does not necessarily mean that ERP needs to be replaced. Training, adjustments to forms, roles, or workflows can help. However, if employees maintain their own records, enter data late, and use the system only out of obligation, the quality of data and control over processes suffers.
Find out why people do not use ERP. If the problem cannot be resolved by modifying the system and it remains complex or inflexible, a new solution may be beneficial.
What to clarify before replacing ERP
Before selecting a new ERP, list what the current system cannot handle and what works well in it. Verify whether the new solution will maintain the common activities that you currently take for granted — such as accounting, invoicing, or data management.
Replacing ERP will not automatically resolve poorly configured processes or unclear responsibilities. Therefore, during implementation:
- describe the current processes and determine which ones you want to change;
- consider whether to adopt the standard procedure of the new system instead of an expensive custom modification;
- do not transfer inefficient processes to the new ERP just because that is how it has always been done;
- involve future users and account for time for training and transition.
When is a new ERP worth it?
Replacing an ERP system makes sense when the current solution is consistently hindering the company's growth, does not cover important processes, cannot handle the volume of data, is difficult to integrate, lacks support, or creates high operational costs. If it is just one report, setting, or specific process, it may be quicker and cheaper to adjust the existing system.
The decision should be based on an analysis of processes, data, integrations, costs, and future needs. The goal is not to preserve the old ERP at all costs or to implement a new one just for modern features. It is about finding a solution that provides long-term value to the company at reasonable costs and risks.
What are the biggest risks of implementing a new ERP?
The first risk is the attempt to transfer all old procedures into the new system. Employee experience is important during implementation, but it is also necessary to assess whether the new process could work better.
The second risk is the transfer of inefficient business processes into the new ERP. As the company grows, it is necessary to standardize some procedures so that a larger team can manage them even with employee changes.
The third risk is underestimating preparation. It is not enough to assume that the new system "will be able to do it." Describe specific processes, verify their solutions, and account for the fact that change requires users' time. If standard ERP procedures can be adopted, it is usually cheaper than extensive customization — and it also reduces future operating costs.