The cost of not moving to an ERP system
When many people research ERP systems, cost is at the forefront of their mind. This is a natural consideration, especially as benefits need to outweigh the costs.
In this article, I am going to look at this point from a wider view. I am going to consider issues for and against moving to an ERP system.
It is obvious that I am pro ERP systems, but let me attempt to share with you a balanced view. We wouldn't expect anyone to make a change to their business if the cost:benefit analysis didn't stack up.
To help lay out the discussion, I am going to work around the following framework:
Considering the pros and cons of moving and not moving to an ERP system
Current state - sticking with what you have
Undoubtedly there will be benefits to staying as you are. These are the 'current positives', reasons to stay as you are. You know what you are doing, you know the costs and your staff know what they are doing.
On the flip side, there will be some downsides. These negatives, associated with staying as you are, will relate to what you are missing out on. Expanding a whiteboard and spreadsheet system is difficult. This limits your growth potential and / or requires a growing admin team for your business. The time spent hunting down production, it is hard to leverage your time.
Future state - embracing an ERP system
So, let's look at the potential future state in a reverse order to the current state.
The negatives associated with moving to an ERP system may include the actual cost of the system. Other negatives might be the fear of the unknown, or the realisation that there will be change. You may need to alter processes. There will be a period of confusion. These are all legitimate concerns.
The positives of moving to an ERP system could be significant. Benefits of moving could include:
- the ability to scale your business
- reducing errors with order input
- lowering administration costs
- speeding up decision making
- making better use of your senior team's time
- improving customer service through delivery performance
There are many benefits of moving to an ERP system, but that is not the point of this article.
Is the future brighter?
By running through a quick exercise like this, you can establish the cost of not moving to an ERP system.
Does the potential for growth outweigh the monetary cost of paying for an ERP system?
Does the changing of methods of working outweigh the comfort of your existing approach?
Does the effort of having to learn a new system outweigh making mistakes in your current system?
You will know when the costs of not moving to an ERP system are too high. The positives about the future will outweigh the concerns with staying as you are. Also, the concerns you have about moving will be less than the benefits of staying with what you have.
If you drew out the image above again, based on these points, you might get something that looks like this:
When today looks worse than tomorrow, change becomes easy
Free demo to help view the future
When you are clear about the costs and benefits of both staying and moving, the decision becomes easy.
I hope this article has given you some food for thought. It is this dilemma that drove us to develop Fraction ERP. We wanted to build something that was ridiculously fast to use. It is fast to learn and as it is cloud based, you can access it anywhere!