Supplement the "Old" ERP System (article)

Supplement the "Old" ERP System (article)

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CBIZ CMF provides business consulting.How many of us have had an underwhelming experience with a new ERP system, only to find ourselves wishing we had instead upgraded and enhanced the “old” system?

New ERP systems have the allure of allegedly delivering one-stop solutions and free flow of data and reporting. While this digital narcotic is enticing, we believe that, for a private equity fund with a 3-7-year exit horizon, the bar for full ERP implementation should be high – very high.

According to Panorama Consulting Solutions, “The #1 reason for selecting a new ERP system was to replace the old system. While this isn’t necessarily a bad thing, it shows that we see too many companies replacing systems because they [think they] have to – not because they want to pursue a larger business transformation.”

A practical alternative: Supplementing an existing system with today’s third-party reporting/data tools, combined with savvy FP&A personnel and processes, enable practical organizations to get what they really want from their current systems — operational, actionable management information and visibility — rather than ripping out existing systems and putting in a new ERP product to increase visibility into business performance.

Investors contemplating the installation of a new ERP solution should instead consider the following value points of third-party reporting/data tool overlays and upgrades to FP&A capabilities:

  • Shorter time frame (4-8 months)
  • Lower investment risk
  • Overall team familiarity – company personnel processing transactions use the system they know
  • Significantly less capital investment
  • Executive team focused on value creation activity

Further noted, Kyle Ludwig, CMF Principal – Strategic FP&A, “Enhancing the organization’s production of timely, actionable information through existing reporting tools and upgraded processes should be the default position. For private equity funds with shorter investment time frames, the return hurdle for a new ERP solution should be very high.”

For More Information

To learn more about the evolving business model, please contact CBIZ CMF.

Copyright © 2017, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

Supplement the "Old" ERP System (article)ERP systems need an upgrade....2017-06-05T13:26:00-05:00

ERP systems need an upgrade.