When your current ERP system no longer provides your business with the support it really needs, what should you do? Should you rush out to buy a new one or stick with what you have?
The options to consider are:
1. Review the configuration of your current system to align with your changing business
2. Having completed option 1, upgrade to the latest release from your current provider
3. Having completed option 1, go to market to find the latest and greatest
So, what factors should you take into account when considering your options? You need to assess the value of upgrading ERP and consider whether an upgraded system will provide the same capabilities as a replacement.
The reason for the first option is that it’s highly likely your business has changed in the years since you implemented your enterprise resource planning software. At the same time, it’s less likely that you’ve continually revised the ERP system settings to maintain alignment with your processes.
The lowest cost option, at least for the short term, is to tweak what you have to fit. Doing so can certainly give you some breathing space.
You are then faced with the real decision: upgrade or invest in something new. There are several key factors to be taken into account – very few of them related to the functionality of the product.
If you’re paying maintenance to your current supplier, you may receive ‘like for like’ software in an upgraded version without further charge for the software. The value of this will depend on how long it was since you last upgraded.
Several disruptive changes have occurred in the world of ERP over the last couple of years – changes that should have a major impact on your decision. Of these changes, mobility is arguably the most disruptive.
Having an ERP screen available on any mobile device is more complicated than you would think. To start with, there is the mix of mobile operating systems – iOS, Android and Windows 8. We also have different screen sizes and layouts, as well as multiple browsers available for use on different devices.
To be effective, mobile ready ERP solutions need to be deployable across all of these devices and browsers. A key point here is that they must be developed using HTML5.
Furthermore, you don’t want your mobile device screens to look different to the screen in your office! So the entire ERP system needs to be completely web-native across the board.
Perhaps this is the definition of disruptive: you wanted to check sales figures on your iPad and someone has just had to rewrite an entire ERP system!
This massively impactful change in demand from users demonstrates why a ‘like for like’ upgrade may not be adequate. You could be faced with server upgrades, OS upgrades, client upgrades and mobile device deployment – a change in your entire IT infrastructure. In addition, you could also be in a position where you have to purchase new licences for the mobile aspects of the software you own and the infrastructure that supports it.
Moving on to an entirely commercial consideration: as an existing customer of your ERP provider, are you at a disadvantage when negotiating on price? Quite possibly, given that you may now be in a single supplier relationship.
So, given the fact that you’re going to spend money on…
• Infrastructure hardware and software
• Additional licences for new add-on software
• And pay list price for the above
…how big an incentive is ‘free’ like for like software? Especially when you consider that given the massive recent changes in ERP, you’re effectively faced with a new implementation rather than an upgrade – with all the business upheaval that will bring.
If you need to upgrade your ERP system, have a look at the total cost of doing so including every element, then look at the market comparing five-year total cost of ownership.