Obsolescence and the ERP system: When the writing is on the wall

February 20, 2012
By guest blogger - Ronald Laxton

Obsolete Computer

ERP Systems can become Obsolete

All good things must come to an end, or so the saying goes. That’s as true for a good holiday as it is for enterprise resource planning (ERP) solutions. Apparently problem-free, the very presence of the ‘old faithful’ which has run your business so successfully for years may be an inhibitor to better performance – and recognizing the signs of obsolescence allows for contingency planning.

Key Technology Changes Impacting ERP

During the past 25 years, we’ve had ringside seats to what happens when products reach end-of-life. Recognizing this phase can be important if you are to take your company smoothly into new-generation solutions – and avoid becoming saddled with a system which inhibits business performance amid escalating support costs.

When software is developed, it is done so within the context of a specific set of technologies. At the time of conception of an enterprise solution, there is a dominant technical framework, with emerging technologies providing new ways of addressing requirements. Within this context, successful software displaces current solutions by providing significantly more than the incumbent market leaders. It does this by utilizing new technology and techniques, adopting programming paradigms previously not possible as the basis for design.

The IT industry is famous (or infamous) for it’s pace of change; the very nature of the way in which technology develops lays the foundation for obsolescence. At some point, a tectonic shift occurs, rendering the fundamental design of an existing system obsolete, with no simple path from the present design to the future.”

Examples of this shift in programming paradigms are clear in the progress from simple assembly languages, to procedural languages and on to object-oriented programming. The point is that these advances enable software developers to do far more with the applications they create. That, in turn, translates into the ability for businesses to function more efficiently and more effectively. In short, the work of the programmers can and often does support the competitiveness of the businesses using their applications.

Today’s Technology – Cloud Computing

The major shift underway today is the emergence of cloud computing as a proven, viable means of software delivery. The dramatically reduced price of operating cloud-based systems completely shifts the cost-base. Those companies which adopt cloud computing at an enterprise level may face risks associated with early adoption, but they are also likely to enjoy enormous advantages in lowering the cost of production. We have seen businesses transformed in ways they could not have imagined by enabling staff to access their system from anywhere with only a browser. The more distributed the operations of a business are, the more significant this transformation is.

However, the shift toward web based solutions also means that many vendors will lack the ability to reinvent solutions which are rooted in now-obsolete programming (and even business) models. These solutions will settle into an extended period of decline.

How to Recognize an Obsolete System

The symptoms of such a decline are clear in road maps, versioning, and the pace of improvements and enhancements. A solution is in trouble when the vendor stops publishing the road map, or when it becomes vague or merely focuses on issues such as compatibility with new operating systems and database versions.

And as end of life approaches, new versions contain few major improvements to their capability. A distinctive trait is the ‘lipstick on a pig’ problem, where new versions provide cosmetic enhancements while significant functionality remains unchanged.

A notable example surrounds the emergence of web enablement; older products unable to be deployed in this manner are ‘wrapped’ with technology that renders their old screens via a separate web service. However, the limitations of the older architecture will continue to operate as a constraint on conceptualizing and implementing new ways of working. Ultimately, the design deficiencies aren’t addressed, as they become prohibitively expensive for the software principals to correct.

The more-aware users of such systems are also likely to understand and appreciate the consequences of impending obsolescence and seek improved alternatives. As a consequence, the vendor in question will experience a decline in market share and a reduction in implementation and support partners.

Conclusion – Taking Action

Recognizing the signs is one thing. Taking action is another. Anyone working in this industry knows that change is rapid and that new advances can fundamentally affect business performance in terms of costs and also new capabilities which can accelerate productivity or efficiency. Modernizing the software that runs your business can mean the difference between competing effectively and struggling to keep up.

Next: read part 2, What Becomes of Aging Technology – and its Users, of the 3 part series.
 

 

About Computer Initiatives
Computer Initiatives is a specialist provider of accounting system solutions, providing support and implementation of ERP software. The recent addition of cloud-based ERP and CRM means that Computer Initiatives can offer a fully web-based solution to address the requirements of clients taking a strategic view of how to deploy systems that enable them to leverage the power of “The Cloud”.

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