Why a new system?

Why do companies want to change their systems?

After all, they have spent a fortune on developing their existing one. All the staff know how to use it. The technicians know how to fix it. Management understand its capabilities.

As you can imagine, changing things is an expensive, risky undertaking. Staff will have to re-trained. Equipment will have to be replaced. Offices may need to be re-wired causing disruption to every-day work.

Some of the reasons for introducing a new system may be:

1. The current system may no longer be suitable for its purpose.

Changes in the way work is carried out means the system is no longer suitable

Happily, the business has grown. Starting out with only ten staff a few short years ago, the system could easily cope with the workload. But now there are a thousand staff in many offices around the world. The system just can't cope.

External influences. For example, new regulations have come along which insist that certain records are kept for years. The existing system was never designed for this.

2. Technological developments may have made the current system redundant or outdated.

Competitors are using more advanced systems that perhaps reduce their costs compared to yours, thus placing the company at a disadvantage.

Customers use more modern systems and insist that you upgrade yours to allow for easier data transfer.

The software supplier has warned that the version you are using will no longer be supported after next year. You have to plan for change.

3. The current system may be too inflexible or expensive to maintain.

A company has to to be able to cope with changing circumstances and this includes having the systems in place to deliver what the customer needs at the least internal cost.

For example, the customer has changed the way it sends data to its suppliers - you - and now your employees are having to manually type in invoices because the system cannot cope with the new format. Added costs, less profit, less competitive. Time for a new system.

Summary:

Internal Factors	External Factors
Reorganisation When new departments are created or new managers appointed, new systems may be required to support new functionality or new ideas.	Legislation Governments may introduce new laws or requirements that must be complied with.
Users People who use the systems on a regular basis can become frustrated or dissatisfied with their existing system. This can be due to a number of reasons e.g. constant errors, slowness of the system, inability to deal with new processes.	Competition A new market opportunity may be identified.
New Initiatives When new products are launched, new systems may be required to support them.	Economics A change in the economic climate may lead to organisational restructuring.