Does your ERP system feel more like a roadblock than a tool for success? If your team is frustrated with inefficiencies, outdated processes, or costly customizations, you’re not alone. Many businesses outgrow their ERP systems as they expand, leading to operational snags and missed opportunities.
In this article, we’ll walk you through the six biggest signs your ERP system is holding your business back. You’ll get actionable steps to help you find a scalable, efficient, and cost-effective replacement. By the end, you’ll know exactly how to ensure your next ERP system works with you rather than against you.
6 red flags that your ERP software needs an upgrade
1. Your employees aren’t happy, and your processes are inefficient
The numbers speak volumes: 40% of retail staff say their employers neglect their technology needs. Tedious tasks were listed by 24% of workers as a reason to leave the job.
Modern talent, particularly younger employees, actively seek workplaces with current technology that can enhance their skills and career progression.
“When the process to achieve what you want takes more
clicks than it should, that’s a red flag.”
What to do instead: Poor ERP system performance leaks over into employee and customer satisfaction. Your ERP system needs enough processing power to handle your volume. It should excel at core business functions, use automation for repeatable tasks, be configurable for your business, and offer resources to train your users.
2. What you’re paying and what you need don’t align
ERP system costs can be misaligned in two ways. Some businesses end up paying for features they aren’t using. Others who chose a lower-cost solution can discover that their ERP can’t handle their business’s complexity.
“First-time ERP buyers are the most likely to suffer from picking an ERP solution based on price. They won’t get the functionality they need to grow or possibly even sustain their business.”
What to do instead: Look for software licensing that fits your budget today and tomorrow. If you’re a seasonal business, look for a software provider with consumption-based pricing that allows you to rebalance your costs with your usage needs.
3. Support is hard to get and even harder to afford
You adjust your business to your customers, competition, and the economy to be competitive and profitable. Your ERP system and how you use it need to do the same. If it takes too long and costs too much to get help configuring and optimizing it, there’s a misalignment.
We’ve seen the impact of this firsthand. A food and beverage B2C distribution company came to us looking for a better alternative after spending its full ERP software budget on software licensing and deployment.
Without funds to purchase the provider's support plan, they dealt with constant issues and questions they couldn't get answered. Their employees were frustrated and resistant to using the system.
What to do instead: Consider how often an ERP software provider innovates and updates its solutions. Cloud ERP solution providers should be able to give you an idea of their security and upgrade schedules and a roadmap for future improvements.
4. Your ERP software isn’t keeping up with your business
If your business plans to expand, your ERP system must support that. Growing companies are more complex. Things like multiple warehouses, currencies, and locations call for more capabilities. When your ERP software starts holding back your strategic plans, it's a clear sign that you've outgrown it.
What to do instead: Make sure that your ERP solution will scale as needed. You need to keep up with your competition, customers, and users. Functionality for multiple entities, currencies, and revenue models mean you can franchise, acquire, expand, and innovate without an ERP system bottleneck.
5. You don’t trust your ERP system’s data or reporting
If you constantly double-check your system's numbers or create workarounds in Excel, that's a red flag. Modern businesses need reliable, real-time data for strategic decision-making. When trust is broken, it's hard to rebuild—especially with your ERP system.
What to do instead: To get strategic insights, you need accurate data and customizable reporting. A broad selection of out-of-the-box reports is a good start. You should also be able to configure and create reports without needing a developer.
6. It seems like everything you need to do requires customization of your ERP software
Some customization of your ERP system can happen. Constantly needing developer intervention for changes is a poor fit. If you need more than one or two capabilities that your ERP system can’t offer, you’re ready to move on.
What to do instead: Signs of an ERP system that can adapt to your needs include integrations with other systems, add-on modules, and low-code/no-code configurations with visual interfaces, pre-built templates, and drag-and-drop simplicity.
What’s at stake with the wrong ERP system
A bad ERP system fit doesn’t just cause frustration—it can have real business consequences. There are impacts on more than just daily operations:
- Operational inefficiencies: Extra steps, unnecessary complexity, and manual workarounds waste valuable time and resources. They can also lead to staff turnover.
- Security vulnerabilities: Without regular updates and patches, your company can be at risk of a data breach.
- Compliance risks: Regulated industries like food manufacturing may struggle to meet regulation requirements and reporting.
- Missed market opportunities: Without the ability to scale quickly, your business can miss out on opportunities or get left behind as the market changes.
- Escalating costs: Ongoing charges for basic upgrades, patches, and customizations drain your budget.
What’s your ERP software partner’s role in diagnosing your ERP system needs?
Your ERP software partner should be your solution advisor, guiding your deployment of an ERP system that fits your business as it transforms. When considering an ERP solution advisor and partner, look for these top 4 things:
- Honesty: An ERP software partner should be upfront about how well their software and company fit your needs. Your success should be prioritized over a quick sale.
- Knowledge of your industry: Expertise in your industry ensures the ERP system is tailored to your challenges and opportunities.
- Mastery of the ERP software: Their committed, deep knowledge of the ERP system helps you maximize its potential.
- Ongoing and proactive support: Your ERP software partner relationship should include regular check-ins and updates. This helps keep your ERP system aligned with your evolving needs. Support should also be readily available and affordable.
The right partner is an extension of your team, helping your business thrive with a system that grows with it.
You shouldn’t settle for less from your ERP software
Don’t let your ERP system hold your business back. If you’ve recognized any warning signs outlined in this article, it’s time to take action. Your company’s efficiency, growth, and profitability are at stake.
Remember, the longer you stay with a system that doesn’t align with your business, the more you risk falling behind your competitors. A modern ERP system can help you keep up with your competitors and position you for future success.
Your next step is to explore how the right ERP software can be a catalyst for success today and a foundation for the future. For essential information on taking the next step in your ERP software journey, get a free copy of The Hitchhiker's Guide to ERP Platforms.
