When should you upgrade your ERP system?

Enterprise Resource Planning (ERP) systems are the backbone of modern businesses, integrating various functions like finance, human resources, supply chain, and customer relations into a unified system. However, as technology evolves, so do the demands on these systems. An ERP upgrade becomes important to keep up with these changes and ensure that businesses can operate efficiently and competitively. This guide explores the intricacies of ERP upgrades, providing valuable insights into why, when, and how to upgrade your ERP system for optimal performance.

1. What is an ERP Upgrade?

An ERP upgrade involves updating an existing ERP system to a newer version or transitioning to a completely different ERP platform. This process can include software enhancements, additional features, improved user interfaces, and more robust security measures. Upgrading an ERP system is not just about adopting new technology but also about aligning the system with current business processes and future goals.

2. Understanding ERP Upgrades

An ERP upgrade often becomes necessary when the vendor insists due to end-of-support for older versions. However, customers frequently worry about the potential impact, including system downtime and the need to redo customizations. This fear can lead businesses to continue using outdated versions, despite the risks.

2.1. Signs that your system might need an upgrade?

Keeping your ERP system up-to-date is important for maintaining efficiency and competitiveness. But how do you know when it’s time for an upgrade? Here are some signs that your system might need a refresh:

Lack of Vendor Support

One of the most telling signs that your ERP system needs an upgrade is when your vendor no longer supports your system software or its underlying infrastructure or platform. Without vendor support, you risk running into issues that cannot be resolved quickly or effectively, which can lead to significant downtime and operational disruptions. An unsupported system can also be more vulnerable to security threats, as there will be no new patches or updates to safeguard against emerging risks.

Need for Cloud Migration

The modern workforce is increasingly mobile and distributed, making cloud-based solutions more essential than ever. If your software needs to be migrated to the cloud to support your remote workforce, it’s a clear indicator that an upgrade is necessary. Cloud-based ERP systems offer enhanced flexibility, scalability, and accessibility, allowing your team to work seamlessly from anywhere with an internet connection.

Maintenance and Access to New Features

Regular maintenance is key to ensuring that your ERP system stays current with the latest technology. Upgrading your system can provide access to new features and functionalities that can help automate your business processes, improving efficiency and productivity. Staying updated also ensures compatibility with other modern systems and technologies your business might be using or planning to implement.

Outdated User Interfaces and User Experience

A dated user interface and poor user experience can lead to employee frustration and reduced productivity. If your staff finds the system cumbersome and difficult to use, it can result in errors, slow adoption rates, and a lack of engagement with the software. Modern ERP systems are designed with user-friendly interfaces and intuitive navigation, making it easier for employees to complete their tasks efficiently and with fewer errors.

2.2. What should be included in an ERP upgrade?

Improved security features to protect against emerging threats.
New functionalities to streamline business processes and increased productivity.
Modern interfaces to enhance user experience.
Better integration capabilities with other modern systems and technologies.
Customizations and configurations to ensuring old system customizations are preserved and re-implemented effectively.

3. Pros and Cons of ERP Upgrade

There are no hard-and-fast rules about when to upgrade system and when to replace a legacy system. The following table offers some high-level pros and cons:

4. Steps to a Successful ERP Upgrade

Upgrading an ERP system is a significant endeavor that can bring substantial benefits to your organization. At 180 Systems, we have developed a meticulous methodology to ensure a smooth and successful ERP upgrade. Here’s a step-by-step breakdown of our approach:

4.1. Planning and Initiation

The first phase of our ERP upgrade process focuses on thorough planning and initiation. We start with comprehensive planning to ensure all aspects of the upgrade are considered and addressed. Key steps include:

Defining Key Project Objectives & Scope: Establishing clear goals and parameters for the upgrade project.
Identifying Project Roles and Responsibilities: Assigning specific roles and duties to team members to ensure accountability and efficiency.
Building the Initial Project Plan: Creating a detailed timeline that accounts for capacity constraints from both clients and vendors.
Building the Financial Tracker: Implementing a system to track the budget versus actual expenditures.
Completing Project Kickoff with the Core Team: Ensuring everyone is aligned and ready to move forward.

4.2. Training and Testing Preparation

Preparation is critical for a successful ERP upgrade. The most important thing is to setup a pilot environment that allows us to identify and resolve potential issues before the full-scale upgrade. During this phase, we:

Initiate Weekly Status Calls: Regular check-ins to monitor progress and address any issues.
Develop User Acceptance Testing (UAT) Script: Crafting a comprehensive UAT script to guide testing.
Set Up Pilot Environment: Setting up a pilot environment allows us to identify and resolve potential issues before the full-scale upgrade. Configuring a pilot environment with the upgraded software version, including any client-specific customizations.

4.3. Training and Testing

This phase focuses on rigorous training and testing to ensure the upgraded system meets all requirements, and to ensure data integrity and seamless integration with existing systems:

Building the Training Matrix: Developing training materials for any new features or functionalities.
Kicking Off User Acceptance Testing: Starting the UAT process to validate the system’s performance.
Completing Training & Testing: We provide extensive training to ensure all users are comfortable with the new system.
Logging and Resolving Issues: Tracking and addressing any issues, aiming for a 100% pass rate on critical test cases and 90% on non-critical ones.

4.4. Go-Live Preparation and Go-Live

The final phase is all about preparing for and executing the system go-live:

Building Readiness Assessment & Cutover Plan: Creating a detailed plan, including a Go-Live checklist.
Completing Readiness Assessment: Ensuring all systems and teams are 100% ready for the transition.
Completing Cutover and Go-Live: Executing the switch to the new system.
Hypercare Period: We provide continuous and intensive support with daily check-ins during the Go-Live week to swiftly address any issues that arise after the upgrade.

By following this structured methodology, 180 Systems ensures that your ERP upgrade is meticulously planned, efficiently executed, and thoroughly supported, setting your organization up for success with its new and improved system.

5. How 180 Systems help you mitigate risks?

At 180 Systems, we understand your concerns and we focus on mitigating risks to ensure a stable transition. Here’s how we help our clients:

Thorough planning to address all aspects of the upgrade, including potential issues and their solutions.
Pilot environment testing to identify and resolve potential problems before full-scale implementation.
Data migration and integration to ensure data integrity and integration with existing systems to minimize disruptions.
User training to ensure all users are comfortable and proficient with the new system.
Post-upgrade support to address any issues that arise after the upgrade, ensuring stability and performance.

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

When an ERP system reaches the end of its life, businesses face critical decisions. Transition plans must be in place to ensure smooth migration to a new system. Support options should be explored, including extended support from the current vendor or third-party providers. Additionally, businesses can consider alternative solutions, such as adopting a new ERP system that better aligns with their evolving needs.

Check out our resource on ERP to find a suitable ERP for your company:

ERP Portal: Get critical information about ERP systems and their implementers with filtering by application, tier and industry.
ERP Comparison: Compare leading systems across multiple dimensions including applications, industries, number of customers, underlying technology, customization, multiple companies, workflow and reporting functionality.

7. Conclusion

An ERP upgrade is a significant undertaking that requires careful planning, execution, and management. While the process can be challenging, the benefits far outweigh the difficulties. By upgrading your ERP system, you can enhance functionality, improve efficiency, and stay competitive in an ever-evolving business landscape. Remember to leverage the expertise of ERP selection consultants, focus on data migration and integration, and prioritize user training and support. With a well-executed ERP upgrade, your business can achieve new levels of success and productivity.

ERP Upgrade Service by 180 Systems

We are independent consultants and do not sell or implement any product to accept any compensation from vendors and implementers for our advice or services. Our advice is based on extensive knowledge of what is available and what is required across a wide range of industries.

For more insights on ERP upgrades and how they can benefit your business, contact our experts at 180 Systems. We’re here to help you navigate the complexities of ERP systems and find the best solution for your needs. Contact us.