Executive Briefings

ERP Vendors and Their Customers Face a Dilemma

The major direction of most of the big ERP companies these days is modernizing and upgrading their ERP portfolio. Epicor, Aptean, Infor, QAD, UNIT4, SAP and others all have major platform upgrades to which they are trying to migrate their customers. This presents a huge dilemma for both the customer and the ERP providers.

Support costs for the end-user company can be quite high. And companies like SAP have actually increased their support fees over the years. But the real challenge in supporting the old platforms is the lack of knowledgeable personnel who can continue to enhance those products. Coupled with the fact that all new sales are based on the latest and greatest technologies on the new platforms, this creates a huge dilemma for the ERP companies. Even though they make a lot from service and support revenues, in reality these older platforms are very expensive to maintain. And like end-users, the ERP providers find a lot more of their developer budgets go to support versus innovation.

However, going through a significant software upgrade is a highly disruptive activity, one that companies generally avoid making until they are compelled to move. Migration is not easy. Over the years, we all have sat through software presentations describing how great the new world order will be. If we subtract a little hype, this tends to be true. Access to all the new cool stuff comes through the new platforms"”users do not want to buy old software. There are motivators, of course, for enticing customers to move to new platforms and software. But there are also workarounds. Therefore, many companies choose those workarounds rather than dealing with the huge disruption of making any major ERP change.

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Keywords: enterprise resource planning systems, ERP implementation, ERP upgrades, supply chain solutions, supply chain systems, ERP system workarounds

Support costs for the end-user company can be quite high. And companies like SAP have actually increased their support fees over the years. But the real challenge in supporting the old platforms is the lack of knowledgeable personnel who can continue to enhance those products. Coupled with the fact that all new sales are based on the latest and greatest technologies on the new platforms, this creates a huge dilemma for the ERP companies. Even though they make a lot from service and support revenues, in reality these older platforms are very expensive to maintain. And like end-users, the ERP providers find a lot more of their developer budgets go to support versus innovation.

However, going through a significant software upgrade is a highly disruptive activity, one that companies generally avoid making until they are compelled to move. Migration is not easy. Over the years, we all have sat through software presentations describing how great the new world order will be. If we subtract a little hype, this tends to be true. Access to all the new cool stuff comes through the new platforms"”users do not want to buy old software. There are motivators, of course, for enticing customers to move to new platforms and software. But there are also workarounds. Therefore, many companies choose those workarounds rather than dealing with the huge disruption of making any major ERP change.

Read Full Article


Keywords: enterprise resource planning systems, ERP implementation, ERP upgrades, supply chain solutions, supply chain systems, ERP system workarounds