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Ditch That Dinosaur! 4 Signs it's Time for a Cloud ERP Evolution

Avalara

When your company first invested in an ERP system, you likely believed it would serve the business for the long haul. As needs change, it’s easy to assume that lugging along an out-of-date ERP is less expensive than upgrading your platform. But reliance on legacy systems and customizations can leave you with an outdated, disjointed platform that fails to offer the insight you need to evolve your business. Worse, it ultimately drains scarce resources.

If you’re stuck on a legacy platform, you’re not alone: a recent Mint Jutras study found that more than two-thirds of the companies surveyed said their ERP system didn’t give them the industry-specific functionality they need.Given the headaches involved in ERP implementation, many companies are reluctant to put more time or money into platform upgrades. Thankfully, many ERP providers now focus on offering cloud-based services and solutions to their customers to ease the cost (both time and money) of upgrades.

Here are a few clues it’s time to ditch your dinosaur ERP and upgrade to modern solutions:

Silo Effect

If your ERP doesn’t manage your entire enterprise, you’re likely not gaining the efficiencies you need to drive performance company-wide. From supply chain logistics to sales to purchasing to customer relationship management, an effective ERP should facilitate data exchange between all functions, providing better insight into synergies (or lack of) across divisions. Without this level of integration, areas of your business are operating in isolation, increasing the chance of inconsistent data and compliance risk.

Cloud-based ERPs scale to meet changing product offerings, new markets, and other growth opportunities. Streamlining and shifting priorities is easier with a cloud-based ERP, coordinating data virtually rather than hog-tying work to an on-premise system.

End-User Frustration and Duplication of Effort

Businesses invest in ERP software to reduce time spent managing data. If your ERP frustrates end-users, whether through unnecessary complexity or lack of cohesion between lines of business, return on investment is reduced. Without the right communication between core functions, you risk duplication of efforts or gaps in process.

The modern ERP reduces duplication by coordinating more effectively between teams. It may take time for staff to get used to the new software and processes. Consider investing in training to get them up to speed faster. Take the time to explain how these ERP upgrades will make their jobs easier and improve department function. Without buy-in from all levels of the organization, even the shiniest new ERP will hamper rather than foster growth.

Manual Compliance

Companies often believe their ERP sufficiently handles compliance. In reality, in-house accounting or IT teams may still be processing critical tasks manually. If you aren’t automating compliance in your ERP, you are doing your business a disservice. Failing to meet regulations such as Sarbanes-Oxley, and not properly collecting and applying sales tax rates and rules could lead to an audit. This means costly penalties and fees if you are found to be out of compliance.

Cloud applications and SaaS solutions are a smart way to fill process gaps and deal with compliance issues in your ERP. They allow you and your team to automate manual efforts, reducing risk, increasing compliance, and creating efficiencies.

Stalled Growth

Acquisitions, expansion into new markets, and new products all bring increased complexity to your business. Your platform needs to handle this flawlessly. An ERP bordering on extinction can’t accommodate keeping disparate systems up-to-date or adding functionality for new business processes. Alternatively, updates to cloud-based or cloud-enabled ERPs are handled in real time, processes and automation are scalable and flexible, and maintenance and software costs are comparatively nominal. Adding specialized modules to address growth opportunities and compliance paves the way to success.

Conclusion

On premise ERPs and applications are quickly becoming relics of the past. In fact, Gartner predicts that by 2016, highly customized ERPs will be obsolete.  Businesses need modern systems that can scale workload, manage data reporting more efficiently, increase visibility between business units, and keep them up to date and compliant with state and federal regulations. The industry is evolving to the cloud. Why wouldn’t your business?

Ready to bring your ERP into modern times?

  • Identify gaps in productivity where your ERP isn’t meeting your needs
  • Talk to your provider about upgrading to a cloud ERP or a hybrid solution
  • Automate more of your business functions with integrated SaaS solutions
  • Opt for pre-certified integrations like Avalara AvaTax

19 Very Scary ERP and ERP System Implementation Statistics, Mint Jutras

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