How to Extend the Life of Your ERP and Still Put Finance in Control in 2021 (2024)

A lot of companies are taking a cautious approach toward technology investments in 2021. That’s not surprising, given the uncertainty of the current global economic climate. For finance teams that were hoping to improve their systems this year, delayed ERP projects might sound like bad news, but if replacing your current system is not in the cards for 2021, there are still ways to enhance the overall value you are getting from your ERP software.

ERP systems typically have a lifespan of between 5 and 15 years. That timeframe can be influenced by a number of different factors. Rapidly growing companies, for example, often need systems that can handle higher transaction volumes or more sophisticated business processes. Companies that expand into new lines of business often require functionality that was unnecessary at the time that they implemented their last ERP system. Businesses seeking acquisition often step up to a new system to meet the expectations of prospective buyers.

For many, though, the decision to move to a new ERP system is primarily about modernization and efficiency. Older technology often fails to perform the same tasks with the same efficiency as newer software can. Newer software offers more integration options, and the underlying technology enables improved performance.

Legacy software often lacks the many small but significant improvements made possible by tighter integration with desktop tools, mobile apps, and browser-based interfaces. For every one of those small improvements that save a worker 15 minutes a day, the organization gains over 60 hours of productivity annually. Multiply that by the number of users accessing your information, and all of those small improvements can add up to substantial improvements in productivity.

So how can your organization extend the life of your existing ERP solution and achieve some of those productivity gains without making the big-ticket investment in an entirely new system? Here’s how to get started.

First, Define the Problem with Your ERP

The first step is to establish a list of the areas that need improvement. What are your organization’s pain points? What are the inefficiencies? Do you delay business decisions because the flow of information moves too slowly? Do you rekey information manually from one system to another? Do errors occur in the process, resulting in downstream mistakes? Do tedious manual tasks consume staff time on a routine basis? Do you call in subject matter experts frequently to “put out fires” that you might have otherwise avoided?

For most organizations, the answer to most of these questions will be “yes,” or at the very least, “yes, to some extent.” While it’s easy to imagine that a new ERP system will resolve many of those problems, a number of other options are available that can ease some of that pain and dramatically improve efficiency and effectiveness throughout your organization.

The process begins with identifying specific problems, prioritizing them, and outlining potential solutions. For example:

Building that kind of a list can sometimes take significant time, with an opportunity for multiple stakeholders throughout the organization to provide input. In other cases, when you define the overall scope more narrowly, the process can typically move faster.

If the focus is on meeting the needs of the finance and accounting department specifically, for example, then it should be relatively easy to arrive at a well-defined list of areas that need improvement. Once that task is complete, it’s time to explore potential solutions in further detail. Here are some of the options that you may want to consider.

1. Explore Third-Party Enhancements

Most of the ERP software released within the last two decades offers some kind of development tool or application programming interface that makes it possible to develop functional add-ons to extend the software’s out-of-the-box capabilities. That has spurred an entire industry of innovative software companies that provide extended capabilities ranging from credit card processing and electronic data interchange to complex add-on products that provide sophisticated capabilities for specific industries.

If you are looking to address a specific need such as e-commerce or executive dashboards, these kinds of third-party enhancements can provide significant value for the money. With the onset of the COVID pandemic, for example, numerous companies added e-commerce capabilities as brick-and-mortar sales declined and buyers increasingly shifted to online purchases. In many cases, the fastest and most cost-effective approach to that problem is to seek out independent software vendors that have pre-built integrations to your existing ERP software.

Executive dashboards, likewise, have become increasingly popular at a time when business leaders are hungry for accurate, up-to-the-minute information. As most ERP systems do a lackluster job with out-of-the-box reporting tools, this can be a fruitful area for investment, especially from the perspective of the finance and accounting team, which relies on that kind of information to fulfill its core mission.

2. Review Existing Processes and Capabilities

It is worthwhile to periodically review existing business processes and practices to determine whether or not there are better ways of getting the job done. The month-end closing process, for example, can be an agonizing process for finance and accounting teams, who often resign themselves to working late into the evening when it is time to close the books.

This process is even more challenging because much of the workforce has shifted to remote operation. Operating with a virtual workforce presents some unique issues, and for many finance teams, it means changing some of the fundamental ways in which they get the job done.

Sometimes you can address current needs by leveraging some of the existing capabilities in your legacy ERP software. If your current system supports the addition of user-defined fields, for example, that may be helpful in storing and tracking data points that are not otherwise available within your current ERP.

By reassessing existing processes, looking for areas that can be improved, and exploring some of the tools that can help achieve efficiencies, business leaders have the potential to deliver very high value for the organization with the right tactical investments. In our example of the month-end closing process, that could take the form of self-service reporting that empowers frontline finance users to develop and modify reports without outside help from IT experts. Or it could be eliminating wasteful manual processes that require exporting data from the ERP system or other software, importing them to Excel, and reformatting them to suit a specific purpose.

Communication and collaboration are also key areas to explore, especially in light of the shift to remote work. We have all become familiar with online meetings, but group communication tools like Slack and online project management aids like Asana and Monday are likewise easing the burdens of operating as a virtual team. In the case of reporting tools, report distribution capabilities are extraordinarily helpful, provided that their design includes good security measures.

3. Free Up the Flow of Information

Perhaps the single most effective means of increasing the value of your current ERP system and extending its useful life is to upgrade your reporting capabilities. In a volatile business environment, timely access to information has become critically important. Not only does it help business leaders spot problems as soon as they appear, but it also supports better, more informed business decisions.

You can’t overstate the value of real-time information. When the federal Paycheck Protection Program was rolled out in the United States, for example, the businesses that were able to respond quickly were the first in line to get assistance. That required managers to assemble all the necessary information for SBA loan applications, and later, to report payroll and occupancy expenses to apply for loan forgiveness. Similar government assistance programs around the world also required companies to rapidly assemble information into reports that they presumably had never required before. At a time when liquidity was urgently needed, the ability to get information quickly made a huge difference.

During these uncertain times, access to up-to-the-minute information continues to be essential for business agility and resilience. In their 2021 Governance Outlook: Projections on Emerging Board Matters, the National Association of Corporate Directors and Partners highlighted supply chain visibility as one of the key factors in business resiliency for the coming year, underscoring the value of building an organization that prioritizes transparency.

For the finance team, in particular, the ability to create reports with real-time information is critical. Unfortunately, most ERP systems provide reporting tools that are merely “good enough.” They lack the ability to transform and analyze information on the fly, and they typically require support from IT experts whenever existing reports need modifications. New reports, likewise, can take days or weeks to develop because they rely on specialized technical skills or expensive outside consultants.

Spreadsheet Server from insightsoftware makes it possible to build sophisticated reports and analyses directly inside Microsoft Excel. Spreadsheet Server adds specialized functions to Excel that make it possible to access ERP data in real time, without a detailed understanding of the underlying data structures within the ERP system. Because Spreadsheet Server uses the native security mechanisms built into your ERP software, you can be confident that access to critical business information is secure.

Spreadsheet Server also includes mechanisms that support report distribution, including scheduled reports, on-demand (push) report distribution, read-only or read/write access for specific users, and more.

Finance and accounting personnel intuitively understand Excel and prefer it as the tool of choice for building reports and worksheets. With Spreadsheet Server from insightsoftware, users in finance and accounting have the kind of full control that they are accustomed to when working with Excel, but with the added benefit of linking directly to their ERP data.

It’s a common refrain that we hear over and over again from business managers: “We know that we have a lot of data in our software systems, but we have trouble getting access to them in a meaningful way.” Very often, new ERP implementations aim to facilitate the free flow of meaningful information throughout the organization. If a new ERP system is not in the cards for your business at this time, you can significantly enhance the value you get from your current system with an upgrade to your reporting tools.

Not only can purpose-built reporting tools enhance your current systems, but they can also set the stage for a smoother migration when you eventually do choose to move to a new system. Because Spreadsheet Server integrates with a multitude of different software packages, you can transition to a new ERP system in the future far more smoothly than you otherwise would. Instead of completely rewriting your entire library of reports using a new (and unfamiliar) reporting tool, you can transition your current reports with relative ease.

At insightsoftware, we commit to helping business leaders gain access to information that is timely, accurate, and consistent. If you are looking for ways to extend the life of your current ERP system and achieve greater agility and resilience in your business, request a free demo today.