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Everything You Need To Know About ERP Upgrades

Technology has been evolving at a dizzying pace over the past decade and enterprise resource planning (ERPs) are no exception. A system that felt like a sound investment a handful of years ago may no longer be serving your business — either because the technology is decaying or because your business’s needs have changed.

This brings you to a crossroads: Do you upgrade your ERP with your current vendor, or do you replace it? Each option has its pros and cons. But neither option is typically quick or easy, so you want to be certain your investment of resources will pay off. How do you make the right decision for your business? In this article, we will lay out everything you need to consider.

What is an ERP upgrade?

An ERP upgrade is when you move from an older version of an application to a newer version of the same application with the same technology vendor. For example, you may go from Epicor 10.2 to Epicor Kinetic 11. With on-premises software or hosted/hybrid cloud software, an ERP upgrade can be a fairly involved process since it involves reviewing release notes, performing an impact analysis, cataloging your test cases, full regression testing, training, and change management.

With ERP software that is hosted in the cloud, on a software as subscription or SaaS model, updates happen frequently and usually automatically. You may not even know the update happened, unless it is a big maintenance issue causing an outage which your provider will give you advance notice of. In this article, our focus will be on-premises ERP upgrades, since with cloud ERP, upgrades are essentially a non-issue.

Note: Some folks may refer to the process of moving from one ERP vendor to another (or moving from simple point tools to an ERP for the first time) as an ERP upgrade, but it would be more accurate to call it an “ERP migration.” You can read all about ERP selection here.

Why should I upgrade my ERP?

There are myriad valid reasons to upgrade your ERP, but they almost always boil down to one of two core concerns:

  1. Your existing ERP software is not performing as well as it used to. Like most things, software is subject to wear and tear. Over time, performance will inevitably decline as the technology ages. Additionally, many businesses will add customizations or change their data structures gradually over many years until any minor change or patching to the system requires a significant effort.
  2. Your business is growing and needs more sophisticated capabilities to sustain that growth. If your business processes change to accommodate a growing company, your past ERP capabilities might not be able to support those changes. Leadership needs clear and accurate visibility of these processes to make sound decisions.

However, when you are experiencing either of these problems, you may choose to upgrade your ERP to solve it, or you may opt to select a new ERP system.

Advantages of an ERP upgrade

  1. Often, and upgrade is less disruptive to your digital ecosystem. With careful planning, your existing integrations and customizations may stay intact and functional.
  2. Your team does not have to onboard a new product and learn a brand-new interface. User adoption will be less of a challenge.
  3. Though this is often offset by moving from a small support fee to a larger subscription fee, it also assumes there is no opportunity cost by not automating or streamlining related business processes.

Advantages of an ERP selection

  1. Technology is rapidly improving, and there may be new features available that didn’t exist when you purchased your original system. This gives your users the chance to rethink their business processes, data structures, and reporting capabilities in a way that typically does not happen during upgrade projects.
  2. If you move from legacy ERP to a newer cloud ERP system, you will benefit from regular automatic updates in the future.
  3. If you are unsatisfied with your current vendor, this is an opportunity to start fresh.

What if your ERP product is nearing the end of its life?

If you are thinking about upgrades and your product is at the end of its life, then you may want to consider a selection. As the world increasingly embraces cloud software, providers of on-premises solutions are stopping to support older releases. For example, in 2018, Microsoft announced its last official release for Great Plains (later called Dynamics GP). They notified customers that they would receive end-of-life support, meaning 10 more years of support from Microsoft.

As of 2029, companies can still use the product since they bought a perpetual license, but Microsoft will no longer provide support. This means companies have the choice between supporting using in-house IT resources (a decision that carries some risk) or thinking about doing an ERP selection. What should you do if you find yourself in this situation?

If you are running an outdated version, but it still meets your business needs and you are receiving security patching and support, there is no urgency to upgrade. If you do not have the resources to spend on that upgrade, then you don’t need to. If you have in-house IT resources who know the technology, then it is a lower risk, or if you have a third-party support vendor who still focuses on the product, then it is a sound decision.

But you must also bear in mind that running an unsupported version of your ERP system carries some risks to your business. Security is the most acute. If you have a legacy ERP system that is no longer receiving security patches, then consider it a burning platform that needs to be replaced ASAP. If that software breaks down, you may be caught without coverage.

Critical failures can result in significant business downtime, so lack of a support option should be considered a critical risk. This is a big reason why many people prefer cloud-based ERP systems — you are almost always on the most recent version of the software.

Parting wisdom: Always test first

If you have decided an ERP upgrade is the right choice for your business, congratulations! We want to leave you with one last tip to make sure your upgrade process is as smooth and seamless as possible: Test as if it is a new implementation and take the opportunity to fix problems that have been lingering for some time. You may have customizations in your instance that just do not behave as expected with the upgraded software. Sometimes there are new layouts for data, changes to APIs to external systems, or new screen layouts that will affect the user workflow.

Take full end-to-end testing seriously, document your use cases, and take enough time to be able to evaluate and adapt to new features in the system that will make your processes better.

Citrin Cooperman’s Strategy and Business Transformation Practice is here to help you through the ERP upgrade process. Contact us today so we can help prepare you for a successful upgrade.

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