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Vendors offer incentives for sticking with legacy ERP

Lauren Gibbons Paul, Contributor

If your ERP system isn’t broken, why fix it? That is the reasoning many companies are using for not swapping out their legacy ERP systems in favor of a slick new on-premises or on-demand

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solution. IT budgets are beginning to thaw, but with the economy still uncertain, the risks of migrating a mainstay enterprise application are just too high for some manufacturers.

But some ERP consultants say that doesn’t have to mean sticking with a workhorse system installed years ago. They caution that companies that do so will likely miss out on advanced functionality that could help optimize business processes and speed up transactions.

It could be a profitable time to upgrade, as many established on-premise ERP vendors are offering ERP maintenance,  free additional ERP licenses, and upgrade credits and  implementation help. 

Veteran ERP consultant Joshua Greenbaum says vendors are focused on making upgrades easier.  “They have enhancement packs that are supposed to be done painlessly and without intervention. Everyone has standard procedures for doing upgrades,” said Greenbaum, principal at Enterprise Applications Consulting in Berkeley, Calif.  

Vendors are also interacting more with the systems integrators and channel partners that are doing the upgrade work to ensure all goes smoothly. Even if a company is small and the business is not worth millions to the vendor, Greenbaum says to expect a fair share of attention when making the upgrade decision. This is a big change from years past, when only large companies could expect to have their vendor’s ear.

Encouraging a dialog with ERP vendors

Not only are ERP vendors being more attentive to all their customers, they are also opening the kimono more than in the past, said Michael Baccala, partner at PricewaterhouseCoopers LLP, the New York-based accounting and consulting firm. “They’re sharing their product roadmap and collaborating more with customers about what direction they would like to see the product go,” Baccala said. For companies whose ERP platform is missing long-needed capabilities, now is the time to speak up, he said.

Another incentive: Many ERP vendors are offering free evaluations by staff or a third-party consultant to determine if the customer is getting the most out of the system. This option can be very helpful, as most companies are looking to get better use of their existing technology, according to David Tilk, a partner with PricewaterhouseCoopers.

“With any implementation, no matter when it was, you’re going to find gaps between what you implemented versus what you use. As companies are looking to be more efficient and drive down costs, they need to look at ways to increase automation,” said Tilk. The question becomes how to adopt an  ERP system’s new capabilities to streamline business processes and become more efficient.

According to Tilk, many companies take the path of least resistance, pushing through an upgrade without really understanding what process changes it can enable. “We often see clients do that,” he said. “It pays to stop and take a closer look at their business processes and realign them with their business objectives. That is something a lot of clients are doing with the help of their vendors.”