ERP systems form the backbone of many companies, but their performance declines over time and this has a major impact on the way the company works. The study "ERP in Practice 2022/2023" by Trovarit shows that the average age of ERP software is around 13 years. This means that the majority of companies rely on systems from the early 2010s that are often not designed to meet today's challenges - be it due to technological, economic or regulatory changes.
Technological developments since 2010 have brought about fundamental changes in the corporate landscape. E-commerce, automation and artificial intelligence are playing increasingly important roles in corporate success. At the same time, the world has been shaped by various crisis situations over the past 13 years: The corona pandemic forced many companies to adapt their processes to enable home office work and to strengthen hygiene measures in warehouse locations. In addition, the war in Ukraine has led to rising energy costs, which are still being felt today. Regulatory changes are also posing major challenges for companies: New data protection and environmental laws have come into force, and these also have an impact on business processes.
Many medium-sized companies continue to be successful despite major challenges, often thanks to their strengths: family ownership across generations, a solid equity base, high adaptability and high-quality products.
However, these strengths can only be maintained if there is a modern IT infrastructure behind them. The ERP system plays a central role here. If it reaches its limits, a change should be seriously considered. If you wait too long, you risk declining efficiency and a significant competitive disadvantage in the long term.
When is an ERP change due? Here are 9 signs that indicate that your company needs new ERP software:
1. Declining company performance
Outdated ERP systems often cause unnecessarily high administrative costs. This can lead to materials being ordered too late, resources being planned incorrectly, or customer inquiries being processed slowly. Such efficiency losses have a direct impact on a company's competitiveness. These problems can be solved by switching to a modern ERP system.
2. The ERP system is too inflexible
Markets and business models are changing rapidly. Old ERP systems are often not agile enough to keep up with these changes. If adjustments take too much time or cost too much, or are even impossible, inefficient workarounds or isolated solutions often arise. A lack of scalability, for example when a company grows, is also a clear indication that an ERP change is necessary.
3. The range of functions is not sufficient
One of the most important warning signs is that not all required functions can be covered by the existing ERP system. Employees often have to be creative and resort to short-term solutions, such as manual data transfers using Excel. In the long term, these quick fixes lead to confusion, a lack of transparency and an increasing susceptibility to errors. A modern ERP solution should cover all business processes seamlessly.
4. The performance leaves much to be desired
Digitalization brings with it growing amounts of data. Outdated ERP systems often cannot cope with this volume of data. Long loading times, system crashes or inefficient reports are the result. If the ERP system slows down your business processes, an upgrade is unavoidable.
5. There are compliance gaps
New regulations such as the EU GDPR, the GPSR or the e-invoicing obligation place high demands on IT systems. If your ERP software cannot comply with these requirements, legal and financial risks arise. Such gaps are a clear signal to modernize the ERP system.
6. Lack of information transparency
Well-founded decisions require current, consistent data. Older ERP systems often fail to centrally connect all business areas and processes, and the resulting lack of transparency can prove to be an obstacle to effective management. A modern ERP system should offer comprehensive analysis and reporting functions, as well as connections to powerful BI tools.
7. Reduced mobility
Hybrid working and mobile access options are standard today. If your ERP software causes problems in the home office, does not offer apps for field service or does not support a mobile solution for scanning barcodes , this hinders productivity. Modern ERP solutions should enable easy access to data and functions - anytime, anywhere.
8. Lack of interfaces and connection options
Digital transformation depends on networked systems. If your ERP cannot exchange data with suppliers, customers, shopping platforms, accounting programs or other internal systems, it will become a brake on digitalization. A lack of IoT integration or manual data exchange are also clear indications that a software upgrade is necessary.
9. High maintenance costs
Older ERP systems often entail high costs - be it through expensive hardware upgrades, lack of support or costly adjustments. A modern system can reduce operating costs in the long term while increasing efficiency.
Conclusion: The introduction of a modern ERP system brings many advantages that help companies to compete successfully and overcome crisis situations.
If one or more of the above-mentioned signs apply to your company, you should consider changing your ERP system. Switching to a modern system not only increases efficiency and flexibility, but also secures you a leading position in a dynamic market environment.
On-premise or cloud: which is the right solution?
An important question when introducing a new ERP system is the choice of operating model - local (on-premise) or cloud-based. Both approaches have advantages and disadvantages that should be weighed up individually. Find out more in our article on this topic.