The question of when to replace an ERP system is never an easy one to answer. There are always many things to consider: How long has the current system been in place? How well is it running? What issues are users experiencing? How much will it cost to replace the system?

These questions must be asked before an organization even considers investing in a replacement system. While it's true that ultimately any system can probably be improved in at least some areas, the best thing to do is determine what factors are important for the organization and what needs must be fulfilled. 

Unfortunately, it's here when some companies start to compromise various features or performance factors for the sake of mitigating the need to buy a new system. Organizations will talk themselves into keeping an aging system past its prime because they don't want to deal with the high initial costs of buying a new solution. That isn't necessarily the best practice either.

Decisions should be made from a financial perspective, but there are many things to think about prior to deciding whether or not to go forward with a purchase. An article in the Manufacturing Business Technology Magazine suggests that there are several factors that go into determining the cost effectiveness of a new system.

"Cost savings may even be more than sufficient to justify the entire investment. In most cases, however, the greater return is on the top line," the article says. "Improved performance from using the new system's capabilities can result in improved customer service and lead to increased sales. Additional positive effects are improved employee satisfaction and retention, increased agility, better supplier relationships and performance and more."

After taking all of this into consideration, it may be determined that buying a new system is what's best for the organization. If that is the case, working with a business management software provider will help companies obtain the highest possible return on investment.