Why Invest an ERP System Now? The Downside of Playing it Safe in Today’s Economy

During economic downturns or periods of uncertainty, like the upcoming presidential election for one, businesses often tighten their purse strings, deciding to delay spending on modern technology and prioritize immediate needs or cost-cutting measures. And that’s a smart move. Mostly. As long as you’re not prioritizing cost efficiency over efficiency in general. Often, technological investments, especially during a downturn, can keep your business running smoothly until the economy rights itself as well as position you to take advantage of new opportunities. So instead of thinking of reasons not to purchase, you may want to consider why now may be the best time to upgrade or purchase an ERP system for your company.

Reason Not to Purchase: Focus on Cost Efficiency
Reason to Purchase: Focus on Cost Efficiency
You probably see where we are going with our subtitles. Sometimes the reason not to purchase is the very reason it’s smart to purchase. In challenging economic times, businesses may focus on reducing operational expenses. An ERP purchase or upgrade may be deemed too costly and not the most efficient use of cash. The question you should ask yourself: “Is operating at peak efficiency one of the ways my business will not only survive, but flourish in a weakened economy?” If you have not invested in the latest technology, such as a cloud-based ERP system, the unfortunate answer is “no.”  Modern ERP systems incorporate industry best practice business processes, which can lead to more efficient operations and increased productivity. These processes are crucial in a bad economy where maximizing efficiency is essential. By automating and optimizing processes, companies can reduce operational costs, such as labor and inventory to name a couple.

Reason Not to Purchase: Budget Constraints
Reason to Purchase: Budget Constraints
In addition to reducing operational costs, businesses often decide to forego spending on innovative technology investments, adopting a “wait it out” mentality to survive the economic downturn. They tend to prioritize investments that focus on short-term ROIs, but this period may be the best opportunity to reconfigure the budget to allow for the purchase or licensing of a modern cloud ERP system. Why? Businesses can allocate funds specifically for ERP implementation as part of their annual budget planning, and they may be in an advantageous position to negotiate a good deal. Negotiating with ERP vendors for competitive pricing, discounts, or additional modules or services can reduce total cost of ownership to make the move to a modern ERP. Even in good economic times, many ERP vendors offer financing options such as installment payments or leasing arrangements. But during a downturn, they may sweeten the deal because, just like everyone else, they need to make the sale to keep their lights on. They may offer you enhanced opportunities to spread out the cost of the ERP system over time, allowing you to invest in additional innovative technology, like artificial intelligence or robotic process automation which work well with new cloud ERPs. If you have current cash flow constraints, now is the time to explore multiple vendors and leverage competitive quotes to secure the best value for a modern ERP investment.

Reason Not to Purchase: Risk Aversion
Reason to Purchase: Risk Aversion
Economic uncertainty can make businesses more risk averse. They may hesitate to commit to long-term investments like ERP systems until economic conditions stabilize and future revenue streams become clearer. But risk aversion may be the very reason not to delay purchasing an ERP system especially if your business must consistently mitigate risks and remain in compliance. No technological tool offers better assistance for compliance than a modern cloud ERP system. And let’s face it, legal fines for non-compliance could vastly outweigh the cost to implement the very system designed to keep that from happening.

Overall, the reasons to invest in a modern ERP system far outweigh the excuses not to. In times of economic uncertainty, we often feel obligated to hunker down and ride out the storm. But let your competitors do that. By investing wisely in a modern ERP system, you can unfurl your sails and turn into the storm—equipped with the latest and greatest technology. And as a result, like Forrest Gump, you’ll be bringing in the shrimp when everyone else’s nets are empty.