ERP Migration vs. Upgrade: 5 Things to Consider

To Migrate or To Upgrade?

You know your ERP is no longer working as effective and efficiently as needed. But should you purchase the recommended upgrades or add-ons for your current solution, or migrate to an entirely new system? Both require planning ahead, an investment of time and resources.

Think about it…

To Migrate or To Upgrade?

You know your ERP is no longer working as effectively or efficiently as needed. But should you purchase the recommended upgrades or add-ons for your current solution, or migrate to an entirely new system? Both require planning ahead, an investment of time and resources.

Think about it…

Before making the decision, here are 5 points we would consider at Software ThinkTank:

  1. 1. Budget – A brand new ERP system is a significant investment. The cost varies according to company size, from $235,606 (company under $50-million), which averages $7,853/user, to $2.7-million (company over $1-billion), which averages $3,278/user1 for software and service. An upgrade may cost less, depending on what needs upgrading. But it may not. It pays to do your legwork.
  2. 2. Benefit vs. Risk – What advantages are there in a new system that you cannot get from an upgrade? Keep in mind that all implementations carry risk, so the more changes involved, the greater the risk.
  3. 3. Logistics – An ERP system should have a lifespan of 15-20 years. How much has your business changed since implementing your current legacy system? If it has changed significantly, it is possible that your existing infrastructure cannot easily support an upgrade without a significant investment of money and time. Your best bet is to evaluate which critical functions need to be changed. If it’s just a couple, an upgrade may be sufficient.
  4. 4. Adoption – Have your employees embraced your legacy program or are you having adoption challenges? What do they like about your current system and what don’t they like? Are the negative aspects something that can be changed with an upgrade? Or is there another ERP solution that your people will be more familiar and comfortable with and therefore use consistently?
  5. 5. Compatibility – How compatible is your legacy ERP system with the rest of the software used in your organization? Will a new ERP system be more or less compatible with your legacy software?

Ultimately, you need to discuss these points with the key stakeholders in your company and with your ERP solutions provider before making the decision to purchase new or upgrade your current system

1 Enterprise Strategies Insight and Advice for Enterprise Executives, Aberdeen Group, October 17, 2006

Before making the decision, here are 5 points we would consider at Software ThinkTank:

  1. Budget – A brand new ERP system is a significant investment. The cost varies according to company size, from $235,606 (company under $50-million), which averages $7,853/user, to $2.7-million (company over $1-billion), which averages $3,278/user1 for software and service. An upgrade may cost less, depending on what needs upgrading. But it may not. It pays to do your legwork.
  2. Benefit vs. Risk – What advantages are there in a new system that you cannot get from an upgrade? Keep in mind that all implementations carry risk, so the more changes involved, the greater the risk.
  3. Logistics – An ERP system should have a lifespan of 15-20 years. How much has your business changed since implementing your current legacy system? If it has changed significantly, it is possible that your existing infrastructure cannot easily support an upgrade without a significant investment of money and time. Your best bet is to evaluate which critical functions need to be changed. If it’s just a couple, an upgrade may be sufficient.
  4. Adoption – Have your employees embraced your legacy program or are you having adoption challenges? What do they like about your current system and what don’t they like? Are the negative aspects something that can be changed with an upgrade? Or is there another ERP solution that your people will be more familiar and comfortable with and therefore use consistently?
  5. Compatibility – How compatible is your legacy ERP system with the rest of the software used in your organization? Will a new ERP system be more or less compatible with your legacy software?

Ultimately, you need to discuss these points with the key stakeholders in your company and with your ERP solutions provider before making the decision to purchase new or upgrade your current system

1 Enterprise Strategies Insight and Advice for Enterprise Executives, Aberdeen Group, October 17, 2006

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