For many businesses, upgrading their ERP system is a project that lurks in the background for all too long, with many sceptical of the upheaval it will bring, while some may not even be sure which features from the latest update will benefit them.
For those that choose to update their ERP system to the latest version, many find themselves doing so for the same reason. A study from the Aberdeen Group, a technology and services company, in February 2017 found that 55% of businesses that choose to update their ERP system do so because they wish to 'take advantage of new functionality'.
Other reasons included:
- The new version offers enhanced ease of use - 29%
- The new version is more flexible - 27%
- The performance of the old version is inadequate - 26%
- The vendor no longer supports the old version - 22%
- The old version is incompatible with emerging technologies - 20%
For most though, the fact that the latest available version of their ERP system enables them to take advantage of emerging/new technologies is the key driver behind their decision to upgrade.
This logic is backed up by the Aberdeen Group, which found that those who have upgraded to their latest available ERP system version have significantly more access to emerging technologies than those that are still on an out-dated version.
Between the two they found:
- 56% of updated users have access to ERP from mobile devices, compared to 20% on old versions.
- 54% of updated businesses have analytics/intelligence integrated into their ERP compared to 37% who have not updated.
- 54% have ecommerce integrated into their ERP order management. Only 27% of non-updated businesses have this.
- 36% have social business capabilities. Only 7% on an old version have this at their disposal.
The benefits of upgrading your ERP system shouldn't just be confined to you being able to utilise new technologies though, with the Aberdeen Group finding that the benefits of an upgraded ERP system are far-reaching, and have a significant impact on profits and efficiencies.
|Average performance||updated||old version|
|Days sales outstanding||33.3||42.9|
|Complete and on-time delivery||91%||87%|
|Internal schedule compliance||91%||86%|
|Accurate financial reports||96%||89%|
|Time that information is received during the 'decision window'||90%||82%|
Source: Aberdeen Group, February 2017
Given the figures presented above, businesses that often find themselves spending considerable time debating whether to upgrade or not due to the associated costs and disruption, should consider the true cost of relying on an outdated ERP system version to support them.
It seems that the long-term benefits of upgrading far outweigh the short-term disruptions.