Business growth occurs at different rates and over varying periods of time. This brings the issue of accounting software and ERP. As your business grows Accounting Software can no longer keep up with the aspirations of the business and it soon becomes time for a bigger system.
Gavin Halse, Director at Adapt IT, says it’s a common problem in smaller businesses.
“Patching of accounting software happens in businesses that have grown substantially where the basic accounting program they started out with can’t deal with the growing complexity of the business.”
There are a wide variety of instigators for an upgrade to an ERP system. For instance the company may have expanded into new markets and need to deal with multi-national consolidations and reporting in a number of currencies.
Technological advancements are occurring more and more frequently. We are reaching the point where solutions purchased are becoming obsolete the next day in some cases. A lot of companies upgraded their ERP software for the millennium and this is now 12 years out of date.
According to Sage, businesses should consider the following three factors when selecting an ERP vendor:
1. Balance between functionality and complexity: The ability of an ERP vendor to simplify business processes without sacrificing system capabilities results in easier adoption of the system and more efficient business processes.
2. Scalability: Most companies plan for periods of rapid growth and the system needs to support this. The system also needs to cater for internal restructuring, which means that the system usage might double, or halve. A system that is scalable in both directions is a necessary enabler of business agility.
3. Cost of ownership: It has been reported that for every $1 spent on software licence, the total cost of ownership is upwards of $7. This ratio can be positively impacted if the implementation is well managed, scope is contained and an experienced support partner is used for post-implementation support and enhancements.