What
To Know Before You Even Think About It
Before you even start to decide on taking the release, you need to understand
some of the realities set by the vendor. Most vendors have a policy about
how long they support an old release, but with most, the practice does
not follow the policy. You need to probe beyond the policy statement to
find out the truth. Remember that the vendor wants you to continue to
pay maintenance and if they stop supporting the release that you are on,
they face a loss of maintenance revenue from you and all the others that
are still on that release. In fact, most vendors have a very liberal practice
on supporting older releases. For these vendors, a loss of support is
not a reason to go to the new release.
If
you decide not to install the new release, you are, in reality, deciding
not to install it at this point. You can usually install it anytime in
the future. Make certain that this is true. Also, when the follow-on release
comes out, does the vendor provide a path which allows you to easily skip
this release or install both at once?
Can
you find out information about this specific release? A great starting
place is with other companies who have already installed the new release.
Perhaps the greatest value in attending user conferences is networking
with other companies so you can share information at a later date. Locate
a company who has already installed the new release. It is the pioneer
that can lead the way for you. How difficult was the installation? What
surprises did they have? Where were the problems?
The
vendor can also help you, in two ways. First the vendor should be providing
information on the installation process. This is important knowledge but
is often scrubbed to minimize the negatives. Second, talk to your trusted
advisor on the vendor's hot line. They typically know the real life problems
that others are having.
With
both of these sources of information, you are leveraging the experience
of others. That assumes that others have installed the new release before
you did. In general, waiting is a very good policy. A CIO friend has a
firm policy that she does not even look at a new release for the first
six months in an effort to avoid being first.
What's
The Value?
New releases typically have a number of applications enhancements, technical
enhancements and bug fixes. The first question is always, what is the
value of these new things? Will the application enhancements be used?
Will they bring value or just be new features? Will they contribute to
the business? If an enhancement is something that you have already addressed
as a custom modification, you must trade-off between the technical value
of not supporting that custom modification in the future with any retraining
and disruption experienced by the user community.
Technical
enhancements should include items like security, speed, compatibility
or leveraging new database and operating system features, etc. Often,
the vendor's motivation for the new release is enabling you to install
new modules. If you need those new modules, the decision to install the
new module means the new release decision is moot. If you do not need
the new modules, it presents no value.
Bug
fixes are always a part of a new release. Typically, this is more an issue
of catching up with all the patches that have been issued so that everything
is at a controlled level, allowing you and the vendor to more easily support
the code. This brings value to the IT department, but this value is not
typically enough to justify the new release by itself.
What's
The Cost?
How do you figure out the cost? You need to inspect each step in the installation
process that impacts either the user or the IT department.
The
IT cost includes the impact of any modifications or integrations that
have been built. The greater the modifications and integrations investment,
the more expensive the installation will be. With or without modifications
and integrations, testing will be required. If you are running in a client
server environment, don't forget the cost of the physical installation
and updating each PC with the appropriate software (the right administration
tools can make this cost minimal). A major cost might be expanding the
hardware to run the new release. This often switches the discussion from
expenses to capital dollars.
User
cost is mostly a retraining effort. If major application enhancements
are provided by the new release, the retraining cost can be significant.
For
both IT and the users, a major cost is disruption. This cost will be very
hard to quantify, but is real. What would the IT people be doing if they
were not working on the release? What projects will be delayed? How much
lost time will the users experience?
Summary
If you have decided to keep an older ERP system and you continue to pay
maintenance, you will (should) be getting new releases from the vendor.
Each new release calls for a business decision. The decision is not a
yes or no answer as much as a now or later decision. The decision must
weigh the value against the cost. If the value does not out weigh the
cost, you are usually just deferring the decision until the follow-on
release is available, giving you a new value and cost decision on installing
the follow-on decision.
About
the Author
Olin Thompson, a principal of Process ERP Partners, has over 25 years
experience as an executive in the software industry with the last 17 in
process industry related ERP, SCP, and e-business related segments. Olin
has been called "the Father of Process ERP." He is a frequent author and
an award-winning speaker on topics of gaining value from ERP, SCP, e-commerce
and the impact of technology on industry.
He
can be reached at Olin@ProcessERP.com.