Your ERP Upgrade: Balancing Tech Adoption with Human Capital Priorities

It’s incredible to think that in 2025, many manufacturing and distribution companies still rely on ancient enterprise resource planning (ERP) systems that literally feature “green screen” technology. These applications perform poorly and are impossible to maintain, with tech support that expired years ago. 

They also make recruiting and retention challenging. Talented folks fresh out of college, representing the lifeblood of our future, have no desire to work on outdated software that does little to help them advance their careers.

In supply chain management, upgrading to a modern ERP platform that seamlessly ties together finance and accounting, warehouse and distribution, and manufacturing, is critical to remaining competitive and agile. But it’s a major undertaking, involving change management, training and strategy. That’s why having the right integration partner is crucial.

Following are five key aspects that promise to make your ERP implementation a success, both in terms of technology and human capital management.   

1 Strategic Goal Alignment

Helping companies achieve successful implementation begins with a dialog between the technology partner and the management team. How much business do you do today, and what are your growth goals? What kind of headcount will help you get there? What new markets and business channels are you planning to explore?

From there, determine what kind of investment will be required on the front end. What’s the total cost of ownership for the new system, factoring in the entire project scope? And how soon will you not only achieve return on your investment, but begin to see tangible benefits accrue? How will this project help springboard your organization into the future? 

You also need to factor in so-called “technical debt.” This describes the cost of doing nothing, and risking continued loss of performance, productivity, efficiency and competitiveness, as well as the diminishing returns of system maintenance. 

2 Workforce Impact

There’s often a great deal of fear and uncertainty among team members when looking at an ERP upgrade, especially when automation and artificial intelligence are part of the equation. People may well ask: Is my job still going to exist? What will my role look like? How will it change? These are valid concerns that must be addressed early and thoughtfully.

A successful ERP implementation is as much about people as it is about technology. Reassurance and clarity need to happen through a well-designed strategy developed in close consultation with your technology partner. To this end, it’s key to appoint an executive champion to act as point person within your business. The strategy should also include leadership coaching, so managers can clearly communicate the benefits and purpose of the new system. By focusing on how the system will enhance productivity, reduce manual tasks and create new opportunities, you build confidence and engagement across the team. It’s a key ingredient for long-term success, well after the go-live date.

3 Reskilling and Upskilling

As part of the ERP implementation, your technology partner should have training plans that help prepare your team to be successful from Day One. Also, most modern ERP systems include a built-in training component that allows users to record business processes and use them as on-screen helps and guided tutorials. These can cover everything from general system navigation to role-specific workflows (such as finance, supply chain, procurement and HR), collaboration and communication, and data management.

Your partner should also have an enterprise-level business process library, a series of recordings based on best practices from prior ERP implementations. They can be used to not only learn the system and how it works, but also make sure that it’s addressing the range of their business needs. 

In short, the reskilling/upskilling process should be a combination of a training plan with instructors and courses, as well as videos and on-screen guidance covering all aspects of system use.

4 Change Management and Culture

Part of change management in an ERP implementation is tied to examining current business processes and understanding why people are uneasy about changes. You may hear things like, “We do it this way every day — why do we need to change?” If you ask them to explain the rationale for existing processes, sometimes they can, sometimes they can’t.

The big idea is working to drive user adoption within the system, by explaining the benefits and how learning it and mastering it’s going to prove advantageous in the long run. In conjunction with your technology partner, it’s a matter of resetting the focus and mindset from “big scary project” to “career springboard.” This involves a good amount of coaching and encouragement throughout the project.

5 Employee Retention and Engagement

Many manufacturers and distribution companies still rely on ERP systems that are 30 years old or older. While familiar, these legacy platforms create major talent challenges. New college or tech school graduates are not interested in working with outdated software that’s virtually extinct outside of companies reluctant to modernize.

This limits both recruitment and retention. It’s increasingly difficult to find workers familiar with legacy systems, and even harder to keep them. At the same time, prospects often avoid companies running obsolete tech due to inherent inefficiencies, plus the painful workarounds and patching required.

Implementing a modern ERP system helps future-proof your workforce strategy. New technology signals to candidates that your company is forward-thinking, invested in efficiency, and committed to creating an environment where people can do meaningful, streamlined work. In today’s competitive labor market, having a modern ERP system featuring automation and AI is a strategic advantage for attracting and retaining top talent.

Sikich, Tech Solutions Pro

Sikich LLC is a global company specializing in technology-enabled professional services. Now with more than 2,000 employees, Sikich draws on a diverse portfolio of technology solutions to deliver transformative digital strategies and ranks as one of the largest CPA firms in the U.S. From corporations and not-for-profits to state and local governments and federal agencies, Sikich clients utilize a broad spectrum of services and products to help them improve performance and achieve long-term, strategic goals.

Technology for distribution companies promises supply chain visibility, enhanced customer and vendor experiences, and lower costs. To accomplish these, distributors, and manufacturers who distribute, work with Sikich to deploy Microsoft solutions that:

• Ensure the right inventory levels.

• Make it easy for vendors to do business with you.

• Manage and track vendor quality.

• Deliver great customer service and experiences.

• Support your e-commerce approach.

• Unify data across sources to unlock insights.

• Ultimately, build a resilient supply chain.

Sikich offers HEADSTART, a methodology our team developed to accelerate the speed of Microsoft ERP and CRM implementations based on industry pre-configurations to address your business’s challenges and opportunities. Our comprehensive skillsets, obtained over decades of experience as entrepreneurs, business owners and industry innovators, allow us to provide insights and transformative services to help strengthen every dimension of your business.

Resource Link: https://www.sikich.com/technology/industries/distribution-technology/