Deciding to purchase a new ERP system for your business is a major decision that, despite the short-term risks, can yield substantial long-term rewards. What are the most significant business challenges that signal your company should purchase a new ERP, instead of enduring a painful status quo?

1. You Have Too Many Manual Processes and Disparate Systems

Manufacturers that use manual processes for tracking inventory, production scheduling and order fulfillment aren’t doing themselves any favors in 2024. Relying on Excel spreadsheets or pen-and-paper methods to manage such tasks is labor intensive and leads to inefficiencies, errors and financial losses. 

Conversely, modern ERP systems integrate all these processes into a single, unified architecture. Current data is shared across all aspects of a business, in real-time. This eliminates data silos with conflicting information and promotes a more cohesive workflow by strengthening alignment and consistency across all departments.

2. The Lack of Real-Time Visibility into Inventory and Quality

Disruption has always been par for the course in manufacturing. When a crisis strikes, not having the ability to see where things stand, in real-time, can hinder critical decision-making. Reactive, rather than proactive, management is not ideal when trying to adapt or survive in the face of uncertainty.

Without visibility into inventory, manufacturers struggle to track stock levels of raw materials, work-in-progress and finished goods. Stockouts, production delays or excess inventory lead to increased carrying costs, missed production deadlines and unhappy customers.

Poor visibility also has a detrimental impact on quality metrics and compliance requirements. The inability to identify and address quality problems quickly results in increased rework, scrap and costly recalls. Monetary concerns aside, such occurrences damage a company’s reputation and lead to regulatory penalties.

Today’s ERP systems realize that real-time optimization across people, processes and systems is essential. By providing real-time collective intelligence from across the organization, modern solutions give manufacturing leaders the ability to pivot in the face of any challenge. The ability to make sound, informed decisions, improves operations while driving sustainable growth.

3. Your Old ERP Cannot Scale, Constraining Growth

Manufacturers experiencing rapid growth and expansion may find themselves saddled with an ERP system that is rigid and inflexible. When this occurs, businesses sometimes turn to costly, imperfect attempts at software customization. This results in higher total cost of ownership and maintenance fees – diverting critical dollars away from other, more important corporate initiatives.

Legacy ERP systems that cannot scale also lack the functionality needed to manage today’s complex manufacturing operations, making these processes inefficient. Manual workarounds often appear to try and remedy such situations. Supplementary systems are often “bolted-on” to compensate, leading to siloed data.

In 2024, the world revolves around data. As an organization’s volume of data increases, legacy ERP systems can experience slower response times and system crashes that kill productivity. Crashes equate to data corruption, loss or inconsistency. Forcing leadership to act on data that isn’t trustworthy is a frightening thought.

Finally, older legacy systems often pose problems during corporate growth when they are unable to easily add additional locations, users and business units.

4. You’re Concerned About Cybersecurity

Legacy ERP systems can pose significant cybersecurity risks for manufacturers in a multitude of ways. 

First, ERP vendors often sunset their older on-premise products. When these solutions are no longer supported, they don’t get security updates or bug fixes which leave the companies that employ them vulnerable. Furthermore, when cyberattacks occur, these older systems offer limited visibility and monitoring which prevent a business from reacting immediately.

State-of-the-art ERP solutions protect against cyberattacks by being in the cloud, and by offering sophisticated encryption, multi-factor authentication and other security measures.

Manufacturers of medical devices, pharmaceuticals and auto parts may also find themselves struggling with regulatory requirements and compliance standards pertaining to data security and privacy. Fines, legal liabilities and a loss of reputation can result if the ERP system in use is obsolete and does not meet regulatory standards.

5. Customer Service and Satisfaction Has Declined

When customers place an order today, whether it’s with a business or with Amazon, they expect prompt processing, tracking and delivery. If problems should occur, the ability to resolve matters quickly is often the difference between a happy and dissatisfied customer.

Outdated ERP systems often are slow, which doesn’t help get orders out the door quickly enough for modern consumers. Also, real-time data synchronization and integration with CRM systems such as Salesforce are often difficult and fragile.

Modern customers expect self-service options such as online order tracking, account management and returns processing. Legacy systems often lack the ability to provide these features, forcing customers to call customer service representatives which can be time-consuming and frustrating. To make matters worse, if such representatives have limited access to data due to the limitations of the old ERP, quick resolutions and reliable customer service may not be possible. 

What Next?

If any of these telltale symptoms resemble ERP challenges that exist at your business, it’s time to learn more about QAD ERP – an evolved solution that merges people, processes and systems to help manufacturers achieve operational excellence and drive world-class productivity. Learn more today by visiting our website.