How to Know It’s Time for an ERP Upgrade in Wholesale Distribution
- September 10, 2024
In most industries, even the best ERP systems become rigid and inflexible over time. An ERP upgrade is often set aside in lieu of higher priority initiatives. Instead of realizing the functionality available within the upgrade, companies make customizations and small enhancements until so much time elapses and your ERP system is no longer supported. The core system doesn’t function as well as it once did.
Below, we break down how you can identify when it’s time for an ERP upgrade in wholesale distribution.
ERP Upgrade in Wholesale Distribution
For many distributors, the decision about whether to proceed with an ERP upgrade is even more complex. Existing processes are already customized to align with significant business strategy decisions, including horizontal growth into additional services offerings. Many times, legacy technologies can get in the way of such advancements. As new go-to-market strategies are put into place, an increasing amount of new customized processes are introduced. Proliferation of acquisitions and integration efforts continue to occur as part of the growth initiative in the wholesale industry, requiring further customization to support differentiating processes, integrate disparate systems, and enable the requirement for a scalable solution.
Within wholesale distribution, serialized and tracking data will be coming into and out of your system. The inordinate amount of data will need to be reportable and searchable as part of standard business processes. As pharmaceutical, biotech, and medical device manufacturers, for example, continue to expand into new products, including those requiring environmentally-controlled distribution, wholesalers must control the cold chain distribution capability while tracking the product through the supply chain and logistic channels. Big data based on the digital revolution requires distributors to be capable of conducting big data analytics and supporting the data volumes required to remain relevant. The ability to integrate and process large amounts data, as well as share and track those data elements across business processes, will become critical.
The cost associated with maintaining your outdated legacy IT infrastructure and operating systems, responding to defects and process irregularities, and addressing compliance failures provides a strong offset to exploring the implementation of a new, stable, and scalable solution – especially one that supports the current and future technology vision along with the aspirations set by the corporate strategy. With that in mind, it’s essential to include an ERP upgrade on your IT roadmap and begin the systems evaluation and business case preparation now.
How do you know when it’s time for an ERP upgrade?
As your business continues to grow and expand through new services or via acquisition, new business requirements are introduced. For instance, McKesson Pharmacy Systems (MPS) announced the integration of medication synchronization and mobile delivery into its pharmacy management systems. These types of business offerings require systems to support the introduction of new solutions without creating impacts, or worse, downtime, for upstream or downstream processes. Additionally, in the pharma space, SAP S/4HANA now includes advanced PLM capabilities that help manage complex product lifecycles, from drug discovery to commercialization, ensuring better control over research, development, and product introduction.