What Becomes of Aging Technology – and its Users?
Part 1: Obsolescence and the ERP system.Part 3: The decision making process for switching to new technology.
Nothing lasts forever, especially not in the information and communications technology industry. Even those enterprise systems which have delivered sound and dependable service over the course of ten or more years, and which aren’t broken, may yet require replacement. That’s not so much a factor of their inadequacy, but rather an inevitable consequence of progress which renders even the best systems eventually obsolete.
Can I Continue using my Aging ERP System?
The familiar expression of ‘if it ain’t broke, don’t fix it’ doesn’t apply universally. If advantage is not taken of the new capabilities and possibilities which are emerging, your company could become uncompetitive. So, while your old ERP system may be functioning perfectly, it may already be impeding your business performance.
Or, more simply, emerging software models mean the ability to achieve the same – or better – business performance at far lower cost. That means reduced cost of production and quite possibly increased productivity, too.
But what becomes of aging technology and, perhaps more relevant to those saddled with it, what of the users?
That is something we have borne witness to over the course of a quarter of a century. As systems approach end of life, a number of symptoms emerge, apart from there being fewer users and a reduction in the number of new implementations. The average age of people working with the systems increases and it becomes harder to find the necessary skills as individuals update their CVs to secure employment on emerging platforms. Older employees may be less inclined to face the challenges of learning new products, and so remain within the shrinking pool of resources with reduced mobility between companies. Support costs are bound to increase.
Aging Systems – Customer Acquisition Target
Perhaps interestingly, even in the sunset years of a system, a mass exodus of clients doesn’t always manifest; the vendor may instead become a target for acquisition. That’s primarily driven by the value seen in the client base; transition may then be encouraged through neglect of the acquired system.
In such scenarios users should consider some questions to guide strategy: It is worth investigating what a change of ownership communicates. What is the practice of the acquiring company? Has it acquired other products in the past? How has it developed those products? How has it integrated them with its existing stable of products? What has been the experience of customers of the system it acquired? The answers may be telling – and could provide valuable insight into the best way forward.
Pro’s and Con’s of Older ERP Software
Working with a system which is nearing end-of-life isn’t all bad news. There are both positive and negative aspects; the extent to which it is still suitable for business requirements depends on the strategy and requirements of your business.
PROs: On the up side, older systems are often settled and therefore stable; any bugs are ironed out and for those companies that don’t need to change business processes, stability means lower cost of ownership. Support is easier, as users are familiar with the system; maturity also means depth of functionality and also depth of skills in the market (although the persons providing that support may themselves be aging and because of their seniority more expensive).
CONs: The major disadvantage is the inability to take advantage of new ways of working; specifically, concepts like web accessibility, cloud computing, better integration of value chains, and the associated features of software as a service may be out of reach. Difficulty may also result when using new technology in other areas of the business with the ERP system, while compatibility issues may result with new operating systems and other peripheral systems which have faster refresh cycles.
Conclusion – Taking Action
Ultimately, it is as important to examine the reasons for making the decision to remain on older technology, as it is to evaluate the case for moving to new. What should be ascertained is whether or not the current system is inhibiting opportunities, and whether new technology will add value to the company. Will it save costs – and can new technology enable changes to the business which can boost performance? Does the business have requirements that traditional ERP systems do not address? The answers to these fundamental questions should guide the corporate ERP strategy.
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”.