Weighing the Factors to Upgrade vs. Migrating to New ERP

In the midst of a very dynamic business environment, many companies have delayed the decision to migrate their current legacy applications to newer and more robust technology.  We continue to see a large number of companies operating their organizations with systems that were implemented in the early nineties.  It is quite common to find a vast network of programs augmenting these applications that were developed outside the core system with multiple “best-of-breed” systems extending the core functionality.  Additionally we find that a myriad of spreadsheets have become the “system around the system” as companies like the flexibility provided by these desktop applications and elect to rely on these applications to run many parts of their business.  All of this contributes to a lack of flexibility, integration and massive duplication effort.

Where Do You Start?

Companies are continually asking the question “Is it time to change our ERP software or should we continue with the current applications?” This is not an easy question to answer, as an ERP implementation requires a significant investment of time, resources and capital.  Conversely, upgrading to the latest release of the exiting application is rarely a “plug and play” exercise due to the significant number of modifications and additional systems that have grown up around the legacy software. These enhancements essentially become “cement shoes” inhibiting any flexibility.  Additionally many have discontinued maintenance and would face significant fees to upgrade the software.  To add even more complexity to the situation is upgrading an older legacy system is in essence a re-implementation.

Points to Consider

• Existing Business Processes – Business process  improvement is the biggest reason we see people changing their ERP systems.  The older ERP systems are much more rigid in their capabilities and forced companies into processes dictated by the system.
• Business Transformation – Most companies have changed how they transact business since implementing the original legacy system weather that entails adding additional facilities, more international business, or incorporating other channels of transacting business (to name a few)
• Technology Changes – Today’s employees are accustomed to the flexibility and look and feel of desktop software as well as transacting commerce via the internet. This adds an additional perception of rigidity of using the legacy applications and often leads to spreadsheets as the most viable workaround.
• Increased Functionality – Most systems implemented 15 years ago were not as deep and wide in terms of functionality as today’s systems.  This contributed to a virtual patchwork of applications running the business.  Additionally the flexibility provided by the work flow capabilities of modern systems eliminate the need to modify the core application thereby leaving the client more able to upgrade to take advantage of more current functionality. 

Conclusion

While standing at the crossroads in deciding whether to upgrade your current system or evaluate alternatives, the logical starting point is to analyze and document the existing business processes, educate our clients on the capabilities offered by more modern systems, and develop a vision of a future state based on industry best practices. This assessment can provide an excellent barometer if upgrading the current system or moving to newer technology is a better option.

With the complexity inherent in selecting the proper path, it is imperative to analyze all the options, evaluate all the considerations, and provide a road map that gets to your destination while minimizing risk and maximizing efficiency.