In government contracting, precision, compliance, and agility are non-negotiable. Your ERP system is the backbone of your operations – managing contracts, tracking costs, supporting DCAA compliance, and enabling timely reporting. But as your organization grows, what once worked well may now be holding you back.

This scenario is all too common: a GovCon grows, diversifies, or wins a major contract – and suddenly, the ERP that once fit like a glove starts to feel restrictive. If you’re wondering whether your ERP is still the right fit, here are three unmistakable signs that it may be time to reassess

1. You’re drowning in workarounds and spreadsheets

If your team is spending more time outside your ERP than inside it, that’s a red flag.

Many GovCons start with entry-level or mid-market ERP systems that serve them well in the early stages. But as contract complexity increases – think cost-plus contracts, indirect rate structures, or multi-CLIN awards – these systems often fall short. The result? A proliferation of manual workarounds, disconnected spreadsheets, and shadow systems.

Lack of integration between the ERP and other systems such as CRM, HR, planning, and inventory create inefficiencies, bottlenecks, and potential noncompliance with FAR and CAS requirements, directly impacting productivity.

Ask yourself: Are your project managers using Excel to track burn rates? Is your finance team manually reconciling indirect rates each month? If so, your ERP may be more of a bottleneck than a solution.

2. Compliance is becoming a moving target

If your systems aren’t communicating efficiently, you’re relying too much on Excel, or  you're using too many manual workarounds, then your ERP may be holding you back. Government compliance isn’t static – it evolves with new regulations, audit standards, and agency expectations. 

If your current system can’t support DCAA-compliant timekeeping, lacks audit trails, or doesn’t provide adequate segregation of duties, you’re at risk. As you pursue larger or more complex contracts – especially cost-reimbursable ones – those risks multiply.

Efficient GovCon ERP systems offer built-in controls, automated workflows, and audit-ready reporting, helping your firm stay ahead of regulatory changes. If your team is spending hours preparing for audits or scrambling to produce reports that should be readily available, it’s time to ask whether your ERP is helping or hindering your compliance posture.

Consider this: If your systems aren’t communicating efficiently, you’re relying too much on Excel, or you're using too many manual workarounds, then your ERP may be holding you back.

3. You can’t scale without adding headcount

A modern ERP should automate tasks, streamline reporting, and deliver real-time insights – boosting efficiency without adding headcount. For GovCons scaling through M&A, joint ventures, or IDIQs, a flexible ERP makes integration and contract management much smoother. The system should empower your team to do more with less, not rely on adding more people to solve problems. 

Key indicators: Are you hiring more accountants just to close the books each month? Is your BD team hesitant to pursue new opportunities due to operational constraints? These are signs that your ERP isn’t keeping pace with your ambitions.

What’s Next?

Recognizing that you’ve outgrown your ERP is the first step. The next is building a roadmap for change – one that aligns with your strategic goals, budget, and compliance requirements.

At CohnReznick, we help government contractors assess their current systems, identify gaps, and implement ERP solutions that support sustainable growth. Whether you’re considering a move to a GovCon-specific platform or looking to optimize your existing system, our team brings deep industry knowledge and hands-on experience to guide your journey.