Minimising ERP upgrade costs

The Bottom Line: Any upgrade of a large ERP system is a significant investment that must deliver business value,...

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The Bottom Line: Any upgrade of a large ERP system is a significant investment that must deliver business value, requiring careful co-ordination of upgrades with business change and expansion to avoid projects with little or no ROI.

IT organisations trying to set a policy for how often to upgrade enterprise applications are either wasting their company’s money or should expect to be frustrated by an inability to get projects funded. All upgrades involve steep fixed expenses, averaging over $1,839 per user and one man week of labor for every business user. The benefits come from expanding the Enterprise Resource Planning (ERP) footprint in two dimensions: users and business processes covered. Desupport of your current release can trigger an upgrade with little or no Return on Investment (ROI). To avoid this, build upgrades into other business expansion or improvement processes that require similar change management, testing, and training efforts.

 

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