How do you know when the right time is for your company to switch to a more modern ERP system?
We know that the issue of modernizing business management systems is present in many discussions within companies, especially when the IT and finance areas intersect.
Let's prepare a text with the 10 main signs you should observe before implementing changes to your company's business management system:
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Need to update the on-premise ERP system.
The manufacturer of the enterprise management system used in your company has announced that support will no longer be provided for the version of the system you are using.
Given this scenario, the manufacturer of the enterprise management system begins to require an upgrade to a more modern version of the system.
However, upgrading the system involves a significant investment of financial resources and team time. Meanwhile, their competitors are implementing cloud solutions and gaining agility with this decision.
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Growing employee dissatisfaction regarding the ease of use of the enterprise management system.
Digital native employees, with a strong presence of technology in their lives, complain about the lack of ease of use and question why their ERP system isn't like smartphone apps, which provide easy and quick access to information.
The omnipresence of digital technology in employees' lives leads them to seek an ever-increasing level of collaboration, quick access to a single source of reliable data with configurable dashboards, mobile access to applications—all with easy and fast regular updates, meaning great ease of use of the system overall.
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The challenges of generating reports with real-time data are increasing.
Companies operate within a context of rapid change, which has a significant impact on their competitiveness.
Given this scenario, the search for high-quality, real-time information is imperative for survival in today's market, where the generation of management reports is of utmost importance.
If generating management reports is complicated with your current business management system, demanding a lot of your team's time due to the system's limitations, and often requiring support with Excel spreadsheets.
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New hardware is required to continue operation.
One analysis that companies should conduct is to determine the need for physical infrastructure changes necessary for the operation of their current business management system.
However, over time, physical structures become obsolete, requiring a large and expensive replacement.
Replacing the physical structure will generate costs for purchasing new equipment, in addition to the indirect labor costs required to operationalize the entire replacement process.
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Increased maintenance costs for enterprise management systems.
In the case of on-premise ERPs, the fees and service costs for maintaining the ERP system increase annually, and many manufacturers see this revenue as something recurring and constant.
Cloud-based enterprise management systems offer reduced IT costs without the need for investment in hardware and infrastructure, and reduce implementation time and the number of teams involved. (link to article on this topic on our blog:) https://activecs.co/razoes-para-ter-um-erp-na-nuvem/)
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Non-integrated systems provide disparate data.
With modernization, companies also increase the systems used in all their business processes.
However, if your company does not have a modern ERP system, this increase in the number of systems leads to a lack of integration between them, offering conflicting answers to key questions for quality company management.
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The organization is growing rapidly and globally.
We know that business growth is often synonymous with global expansion, increasing financial complexity with different accounting, reporting, and compliance requirements.
According to the study "FDC Trajectories of Internationalization of Brazilian Companies"According to a study structured and published by the Dom Cabral Foundation, a progressive increase of 1% per year is expected in the degree of internationalization of Brazilian companies.
Currently, Brazilian companies are present and operate directly in 40,8% of the globe. In other words, 89 countries have Brazilian headquarters or franchises, according to FDC data. There are already more than 500 companies with fixed operations in other countries, going beyond exports.
Given this scenario, a new and pressing need arises: to have the right systems, with well-established processes, to fully support business expansion.
We know that international expansion, mergers, acquisitions, and market growth are hampered by your system of... on-premise ERPBecause they generate complexity requiring support across a wide variety of subsidiaries.
Often, local data centers must meet data residency requirements, which makes the operation even more complex and involves high costs.
However, with the right cloud-based ERP, it's possible to enable the seamless sharing of corporate information between operational areas and all business units, including the company's headquarters. (link to blog post) https://activecs.co/simplifique-os-processos/)
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New compliance requirements demanded of companies by the market.
A growing number of financial and compliance requirements are affecting companies in Brazil today.
These new requirements must be taken into account in enterprise management systems, and the ease or difficulty of their inclusion can generate costs that are often not perceived by organizations.
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Constant increase in business demands imposed by the market.
Is your organization unable to keep pace with the growing demands of the market?
We know that the pace of change in the market is increasing dramatically, and for companies to remain competitive they have to keep up with these changes.
Jack Welch, considered one of the world's greatest CEOs, has a famous quote that perfectly reflects this situation: "When the pace of change within the company is overtaken by the pace of change outside of it, the end is near."
According to the IBGE (Brazilian Institute of Geography and Statistics), a total of 21% of companies close after the first year and 60% cease operations within five years. These figures are alarming, but they also reaffirm the need for all companies to keep pace with the changes imposed by current markets.
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Preparing the company for an IPO, even if it's in the future.
For a company to conduct an IPO, which stands for Initial Public Offering, it is required that the company has very thorough and up-to-date financial controls and information. (link to a blog post) https://activecs.co/gestao_ipo/)
IPOs are an alternative for companies to grow in today's market, and in Brazil this is no different.
Brazilian companies' IPOs have already raised more than R$ 57 billion as of August 2021. and showed a growth of 400% compared to the same period in 2020, according to data compiled by Bloomberg and published in Infomoney portal
The 2021 total surpasses the previous record of R$ 53,6 billion in 2007, when 60 companies went public..
According to market experts from XP InvestmentsAccording to one of the largest financial consulting firms on the market, this is a trend that's here to stay, since... The improved global economic outlook and increased mass vaccination have attracted many domestic and international investors.
Conclusion
Currently, having a modern business management system that is aligned with major challenges is a prerequisite for the survival of companies in today's highly competitive market.
Many companies wonder when the right time is to switch to a more modern enterprise management system.
We know there are 10 signs that all companies should watch for to know when it's time for a change:
- Need for ERP update on-premise;
- Growing employee dissatisfaction due to the ease of use of the tool;
- Increased challenges in generating reports;
- Requirement for new hardware;
- Increased costs for system maintenance and business management;
- Non-integrated systems provide disparate data;
- Organizational growth and global expansion;
- New compliance requirements demanded of the company by the market;
- Increased business demands;
- Preparing for an IPO, even if it's in the future.
Active Cloud Solutions has extensive experience implementing Oracle NetSuite ERP, a modern, world-class cloud-based ERP system.
Consult one of our specialists and get your questions answered. We are available to help you make the best choice for the growth of your business.
