Careful: Your ERP System May Resemble A Yugo – Read On (Know What A Yugo Is?)

Updated: Mar 5, 2018

Written By: Bob Green

Hello again. Forgive the car analogy – but it works for the premise of this month’s entry in yet another instalment of my Objective ERP Insights blog. If you’re thinking about upgrading ERP or just like to read about this subject area, read on. Prior posts are located here. Also, see the bottom of this post for the link to a national webcast on this month’s topic that I’ll be co-presenting for the AICPA/CGMA.

Would you spend big $$ maintaining a Yugo?

Some of us remember what a Yugo is. Eastern European 1970s automobiles known for, well, not much other than being the automotive term synonymous with something old, tired, maintenance-prone, and ugly. (Fun fact: Fiat owns Yugo now – you buying?) Shift your mind, now, to your pending ERP upgrade. Does our definition of the Yugo make you think of your current ERP/accounting system? To many CFO’s and Controllers, it probably does. It’s best to consider why that is, before you undertake an upgrade to a newer technology-aided transaction “vehicle”.

Did you force your ERP (Yugo) to go off-road, or up too many hills?

We’re often introduced to businesses that have pushed the limits of their existing accounting and ERP systems too far. This is often evidenced by either a) excessive and risky work-around’s developed to accommodate for weak or deficient system capabilities in light of the business’ needs; and/or b) horrific levels of expensive, risk-prone customizations that really don’t work well, and can only be understood by one person in some far-away programming land. Is this your business? If so, STOP. Please don’t spend more money customizing your Yugo. It’ll never be a BMW. Or a Ford. Despite this obvious warning, too many businesses have spent tremendous funds on resident lone-wolf consultants or VAR’s to keep the wires connected and the oil flowing in their ERP systems.

Why? Because, in ERP terms:

Sadly, too few companies assess their business processes when they upgrade to a new ERP product, ending up with a deficient solution… Don’t let this be you!

Solution is simple. Use the ERP upgrade process to your business’ advantage. Seek ERP software products that provide native/(baseline) processes that fit reasonably well to your business processes.

A few points:

Mature businesses should be open minded to improving and streamlining their ERP-impacted processes before they consider upgrading their Yugo environment into something more modern-aged.

Allocate money, time and proper internal staff to undertake a legitimate process assessment and documentation exercise. This involves review of a current state and often a development of future state processes. Mapping your future state to a few ERP solutions is a really good idea.

Perform your diligence when shopping for a new ERP solution, armed with your future state processes in hand. This gives you a target to shoot for– rather than going into the process asking the new ERP solution vendors to DO MORE OF THE SAME. If you do the latter, you’ll end up with an overworked and complicated Yugo again, really. Don’t.

We’ll call it for now. Just know that you don’t need to be among the thousands of businesses that have overtaxed their ERP systems, or forced them to do things that they just cannot do. That’s a miserable and risky place to be. Focus on utilizing a sound ERP solution as a foundation for your business transaction and activity processing – and by doing so take advantage of built-in best practices that can help you customize less, and streamline your business even more. Expect that the right ERP can fit well with many, but not all, of your business processes. Run from those ERP vendors that tell you that they want to customize an underpowered solution “just for you”.

Reminder about our team and what we do (we don’t sell ERP software)

If you’re a frequent reader of these posts, undoubtedly you know that we’re serious about making sure you get as much success from a pending ERP migration/upgrade experience as possible. We’re not shy about being realistic, and we speak from lots of upgrade experiences with our clients. With our network of experienced implementation professionals we also collaborate to rescue bad implementations both during and after an implementation “go-live” date. We’re unbiased, independent, experienced CPA’s and Advisors uniquely positioned to guide and support you in this area.