Today, with all the metrics that detail how much your new ERP software will save, increase, reduce, and return to you, one statistic that frequently gets overlooked is staying power. Some ERP software’s have it, others don’t. It could very well be the most important statistic to measure when considering purchasing a new ERP software solution for your business.
So what is ERP staying power? It’s the positive desire that a company has to continue to use their ERP software, year after year, to effectively stay with the product they have chosen because they are very satisfied with it.
How do you measure this quantifiably? Here are 3 key areas that will reveal ERP staying power: customer retention, software focus, and continuing innovation.
1. Customer Retention – There is no stronger indicator of staying power than customer retention levels. Most SMB companies change ERP software every 3-5 years – this speaks volumes to the lack of business value that they’re receiving from their new systems. Simply put, if tangible business value continues to be delivered along with sustained company growth, there would be no need to switch ERP software as often as you change out your smartphone. (More on that here) For true staying power, look at the number of customers that have stayed with the ERP software company for 10, 15, 20+ years. Customer retention rates should be at least 90%+, preferably 95%+.
2. Software Focus – Are you buying your ERP software from an industry-specialized software company, or from an acquisition company specialized in purchasing software companies? Think about it. One ERP solution has spent decades focusing on honing and perfecting the software you will use for your specific industry, while the other has only been focused on how many new logos and products it will be able to add to its lineup the next year. If you want staying power, do you want your ERP software leadership working to make your product better, or working to make their logo portfolio larger?
3. Continuing Innovation – The only way to remain competitive in today’s fast paced marketplace is to have a superior product, great marketing, the ability to deliver, and great customers (see Customer Retention). If your ERP software has not evolved to handle today’s market demands of speed, mobility, and flexibility, then you likely will fall behind on your ability to deliver. Speed kills. If your ERP software has staying power, you are likely taking out the competition with time and efficiency savings, real-time functionality, mobile ERP software solutions, and cloud ERP flexible deployment options.
There are other factors that can play into ERP software staying power, but these are the three largest indicators. Before upgrading to your next ERP solution, reach out to current and former customers to find out what kind of staying power the software has – you just might be surprised what you find out.