ERP, Enterprise Resource Planning, solution are a key driver for many companies in staying competitive and profitable.  Enterprise systems that include SAP, Oracle, CRM, customer relationship management, solutions such as Salesforce.com and the emergence of new software on demand and SaaS based applications which are developed on open source platforms are no longer nice to have technologies for companies. 

ERP, Enterprise Resource Planning, solution are a key driver for many companies in staying competitive and profitable.  Enterprise systems that include SAP, Oracle, CRM, customer relationship management, solutions such as Salesforce.com and the emergence of new software on demand and SaaS based applications which are developed on open source platforms are no longer nice to have technologies for companies. 

Enterprise systems and software are critical for the growth and survival of the majority of companies in North America and Western Europe today.  Because of the elevated importance of these ERP solutions, upgrading systems is not just a nice to have left in the hands of the IT department.  It is a critical strategic initiative on the radar of senior management.

A corporate strategy for maintaining, upgrading and utilizing ERP systems should be well thought out and refined just as any other high level tactical initiative should in any organization.  Organization should know why an ERP upgrade is needed, what the timing strategy is, how to communicate the strategy, and what is required to deploy the upgrade.  Significant resources, cost and business process disruptions occur in these company-wide upgrades and they should not be taken lightly.

Companies need to upgrade their ERP systems because while enterprise systems have long life cycles they are exposed to rapid technology advances and communication volatilities.  The complexity involved with millions of lines of software code and their instability takes quite a bit of resources and effort to keep the data quality acceptable.  That’s why most companies pay roughly 20 percent of their software price annually to keep up to date.

An ERP upgrade strategy involves getting concensus with senior management and the companies long term and short term strategic plans including budget pro formas that extend out 5 to 7 years.  An upgrade frequency policy should be established that will be dictated by company strategy and the new release frequency of their chosen software vendors.  ERP upgrades on average range from every 2 years to 6 years depending on the conservatism of the company.  For many large companies an ERP upgrade would not be feasible due to cost and business disruptions, while small to mid-sized companies may opt for a 2 year upgrade strategy.

Building consensus among stakeholders in the company is critical and is the key driver for a successful ERP upgrade or software implementation and having a well thought out ERP strategy with timelines, resource requirements, budget parameters and ROI analysis will help the communication effort immensely.  Getting feedback and giving managers a heads up of what is happening, when and why fosters better implementation results as well as better user adoption rates.

A project plan should first articulate the overall ERP system Design which will include product features, anticipated modifications, reporting requirements, and business processes that will touched in the upgrade.  Then the development of data migration tasks and data cleaning as well as testing parameters should be addressed.  Next the switchover sequence should be mapped out including group phases and business process sequencing.  Finally a live date, support and monitoring schedule should be laid out.

It may be a long time coming before companies and employees actually welcome ERP upgrades.  But given the growing importance of these value added systems, organizations can at least appreciate the importance that they contribute to the growth and competitiveness of the company and focus full effort on making enterprise upgrades as quickly and with less pain as possible.

Written by :

rich