How long do most organizations use an ERP system? The average length of time an ERP system is in use ranges from six to nine years. Technology is moving at a rapid pace, including enterprise resource planning systems. Current ERP systems are offering more features, like fixed asset tracking or business intelligence. ERP customers can get these new features through purchasing new modules or applications or with an ERP upgrade. Oftentimes manufacturing companies express that they aren’t sure upgrading is worth the time and hassle. There are many manufacturing ERP upgrade misconceptions, we address each below.
ERP to Organization Fit
In an independent study by the Aberdeen Group, manufacturers were most concerned that their ERP system be tailored to their industry. 48% of manufacturing leaders indicated that they required ERP software to contain industry specific best practices. 43% of non-management personnel responded in the same way. Process type dictates the way that planning and forecasting are calculated. Traceability is also determined by process, which is important from a compliance and quality control perspective.
Even though it is possible to get an industry specific ERP system, it my still lack certain needed features. In this situation, a company may choose to customize. In the Panorama Consulting ERP report, 70% of respondents had some customization work completed on their ERP system (representing 11 – 25% of modified code). Only 5% of respondents indicated major customization (representing 26% and greater code modification). The study indicates that the need for extreme customization has been decreasing in recent years. Companies may not need to perform as much customization for their ERP system to perform necessary functions, saving time and money.
Most manufacturers are in a more advantageous situation when selecting and ERP than in years past. The majority of manufacturing leadership has used multiple ERPs firsthand, providing the opportunity for direct comparison. The most important attribute of an ERP system is how easy it is to use. 50% of the Aberdeen Group study respondents indicated that ease of use was at the top of manufacturing ERP upgrade selection criteria. Personnel use the ERP system throughout every single work day, they must be able to perform tasks in a convenient, simple way. An ERP system should reduce work, not create it.
ERP Vendor Capability
The relationship with your ERP vendor can make or break the overall ERP experience. Ideally, the vendor will always give you honest and relevant information. Unfortunately, that isn’t always the case. In the Panorama Consulting study, 46% of respondents were dissatisfied with the experience with their vendor. It can be hard to determine that you get the right vendor for a manufacturing ERP upgrade. To find a good vendor, ask colleagues for referrals or look for reviews online. If possible, search for a specific consultant instead of just the company.