When you work daily with different customers and partners with ERP-related issues, development and challenges, you get a feel for where ERP (Enterprise Resource Planning) development and procurement are going in the Finnish market.
The reasons for renewing an ERP are often strategic, business, or technical. Some companies are looking for efficiency and competitive advantage in their industry by switching to ERP, for others the key reason is to move to the cloud. Often there is a desire to get rid of ERP that is over 20 years old and its “repair debt”, and update old, complex and customized processes to simplified, “best practice” processes in the industry. At the same time, the company is usually freed from the “vendor lock” that may arise if the company’s old ERP can only be maintained by one supplier.
Regardless of technology, companies using legacy ERP solutions have a lot of limitations to worry about. In the next 3 years, companies will be forced to modernize their ERP environment, as their technology has become obsolete in many respects to an unbearable state. Their compatibility is limited, the pace of development is slow and expensive, and integration with other key systems is not possible. This results in silos. Sharing information between businesses operations is difficult, and analytics does not serve the company’s management in real time. Detecting this situation requires the company’s management and owners to be able and competent to understand what benefits and competitive advantages digital transformation would bring in their own operating environment.
Another important factor and reason for modernizing ERP is data security, because if the old security protocols no longer protect the company, it is vulnerable to data leaks and cyberattacks. Similarly, support for current security standards (eg. GDPR) may be missing. There are numerous examples of what can happen to a company at worst. Old solutions simply don’t match world-class technology providers when it comes to security development.
Another important factor to consider is the ability of technology vendors to provide support (and development) for legacy ERP platforms. Suppliers will either be forced to withdraw the subsidy by the deadline and/or significantly increase the cost of the system. Situations arise where, due to lack of investment capacity, a company is either forced to use old ERP or pay significant maintenance and development costs at the end of the ERP’s life cycle. At the same time, these companies are lagging behind as other companies in the industry adopt modern innovations included in new ERPs, such as AI, process automation, mobile solutions, IoT and analytics. Let’s also remember that keeping ERP experts in the company to maintain the old ERP is a reasonable personnel risk for the company.
New modern ERPs almost “sell themselves” with their benefits and features. They’re cloud-based, high-performance, user-friendly, highly integrated, scalable, include real-time analytics, and updates and support services include things like ongoing maintenance of important security, among other things. Leading technologies can be developed and maintained by a wide range of suppliers and integrators.
In modern ERPs, the focus shifts from processes to the data they produce. AI makes people more efficient at work, instead of replacing them entirely. Next-generation ERPs need to support people to perform faster and better, leaving them time for more value-added work.
Company’s management must understand what it is aiming for when it wants to improve the company’s agility, efficiency and processes. It should define the needs and goals of the ERP project based on the business strategy, as well as evaluate the project’s business benefits and return on investment. Often at the beginning of the project, the key challenges of the current state and bottlenecks are also mapped out, which will be solved later in the project. It is important to understand in good time what kind of competence the company needs in the target state of development and to define the internal owner of the project and other key persons in the company. Often, recruitment has to be resorted to due to lack of skills or time. Managing an ERP project is a full-time job.
At Islet, we are experts in ERP transformation, with world-class SAP technology and solutions. We offer services from ERP project kickoff to implementation and continuous maintenance services. We have skilled and experienced architects, consultants and project managers, as well as Islet’s top management always involved in a client project. Contact us – We handle all conditions!
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