Don’t Replace Your ERP System Until You’ve Done This First

When a business has been using an ERP system for any reasonable length of time, it can gradually become less effective, and problems inevitably appear. These aren’t always system failures, often, they’re subtle process inefficiencies that can silently impact or restrict a business’s revenue and growth.

The primary reason ERP systems need periodic evaluation is simple: businesses evolve, but their systems don’t keep pace. Physical processes change within companies, staff turnover creates knowledge gaps, and users develop shortcuts that weren’t part of the original implementation plan.

When facing ERP challenges, many organisations immediately leap to the conclusion that they need to replace the entire system. While that’s occasionally necessary, a comprehensive system review often reveals that optimisation, rather than replacement, is the more cost-effective solution.

ERP issues restricting your productivity 

Without systematic evaluation, the issues that typically emerge include:

1. Knowledge transfer gaps

When staff changes occur, the departing employee typically trains their replacement. This informal handover invariably leaves significant knowledge gaps, with critical system understanding lost in transition.

• Process-system misalignment

Physical workflows evolve naturally over time. Without corresponding updates to your ERP configuration, the digital and physical processes can gradually drift apart, creating friction points across the business ecosystem.

• Under-utilisation

Many businesses run crucial functions on spreadsheets simply because they don’t realise the ERP system can handle these tasks – and more efficiently. This creates traceability issues and increases error potential – if someone accidentally deletes rows from a shared spreadsheet, those orders might never be fulfilled.

• Manual workarounds

Users often develop shortcuts or workarounds that seem efficient from their perspective, but can create downstream complications for other departments.

• Integration opportunities missed

Without periodic reviews, businesses miss chances to integrate their ERP with other systems, forcing users to duplicate work by entering the same information in multiple places.

Benefits of comprehensive ERP reviews

An effective ERP review examines both physical processes and system configuration. First, this involves a physical process review to evaluate how materials, information and workflows move through the organisation. The goal here is to identify and eliminate duplicate processing steps and optimise physical flows within any business constraints.

The second, is the system review. This is an examination of how the ERP is configured, ways different modules interact, and opportunities for integration with other business systems. For example, integrating shipping services can eliminate duplicate data entry and create immediate efficiency gains.

The combined approach, for physical processes and system reviews, ensures both the physical and digital operations are aligned and optimised, rather than working against each other.

When to consider an ERP review

While there’s no rigid timetable, several situations warrant a system evaluation. These include:

1. Time-based

Generally, systems that have been in place for around five years without a comprehensive review often benefit from assessment.

• Operational changes

Major changes like facility consolidation, mergers or significant shifts in business model create natural opportunities for system evaluation.

• Performance concerns

When your system ‘feels’ less useful or staff increasingly rely on workarounds and spreadsheets, it’s time for a review.

• Training gaps

If significant portions of your team members have never received formal training on the system, there are likely opportunities to streamline operations and improve the user experience through some simple and accessible training sessions. 

ERP review next steps

A thorough ERP review typically involves:

• Observation & Discussion – Watching how employees actually use the system in their daily work and discussing pain points directly with users
• Workshops – Engage staff to understand why certain processes exist and examine what users want from the system. Define the processes and assign accountability for keeping the data up-to-date.
• Process mapping – Documenting current workflows to identify optimisation opportunities.
• Training assessment – Evaluating knowledge gaps and creating targeted training plans.
• Implementation – Making recommended changes to both physical processes and system configuration.

The goal isn’t just improving efficiency but ensuring employees understand why specific procedures matter. Users need to recognise that their actions within the system affect colleagues upstream and downstream. When someone understands that entering incorrect data affects inventory management and financial reporting, their attention to detail improves.

While some organisations immediately consider replacing underperforming ERP systems, this approach often misdiagnoses the problem. Many issues stem from process misalignment, configuration limitations or inadequate training – all fixable without the disruption and expense of full system replacement.

Proper reviews help businesses extract maximum value from existing investments while ensuring their ERP and other business systems continue evolving alongside their operations. For most organisations, this represents the best and most cost-effective approach to addressing ERP challenges and keeping business systems running smoothly with minimum disruption.

Phil Abbott is Director at ABS Limited. For more information, visit: abslimited.co.uk