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September 02, 2020

How Often Should You Upgrade Your ERP

how often upgrade

From an off-the-shelf systems integration solution to a supply chain and administrative fixer for operational efficiency, ERP has come a long way in the business world. The past decade speaks volumes of how ERP established itself as a flag bearer of efficiency and success. However just like every technology, ERP systems too needs upgrades to stay relevant.

The problem is when to upgrade ERP has always remained a grey area in the business world. Add that to the time and monetary investment required to upgrade and companies end up resisting upgrades for good.

To start off, there is no standard time frame to upgrade an ERP. While 5-10 years is the average lifecycle of an ERP system according to industry experts, what’s important is to understand why upgrades are needed every 5-10 years. Let’s dig deep into the factors calling for upgrade:

1) Growth

The growth parameters needed to identify the time for ERP upgrades are as follows:

A) New Market

B) New products and services

C) Increasing Demand

Companies are bound to sustain growth and an ERP system installed a decade ago will not be equipped to handle this new infusion of data. As a result, ERP system will need an upgrade before the system loses its effectiveness or worse, crashes.

2) Legacy Technology

Defined as a custom-built application that clients have used since decades, legacy technology is one primary reason for ERP upgrades. The fear of losing out on customizations when upgrading makes companies resistant towards ERP upgrades. With only a handful of employees knowing how this customize application runs and the lack of vendors supporting this customized software, legacy technology calls for trouble. To speak volumes, many a times business objectives change, processes change and the application may not accommodate these changes.

Hence what one needs is a widely supported ERP system like Microsoft Dynamics Business Central. Easy to install easier to upgrade and technically simplified so that employees and vendors alike can support and run.

3) ERP ineligible to qualify for updates

When an ERP version say for example that of Microsoft Dynamics is several iterations behind the latest version I.e. Business central. One misses out on the latest patches and updates as the software is too old to apply. To get hotfixes like payroll tax and year end updates, businesses would need to upgrade to Business Central.

4) Regulation Requirements

Regulatory changes have become the new normal and can even call for ERP upgrades. Complex accounting and revenue recognition rules, weak controls and weak functionality are primary reasons that make upgrades necessary when regulations change. A classic example being the Sarbanes-Oxley Act in 2002 where companies did not have the required controls and had to upgrade.

5) Issues with Current System

If the current software is acting slow or taking more than the standard processing time, ERP upgrade is in the cards. A cutting edge up-to date software with the latest technology can speed up the processes and get the business back on track to attain efficiency.

6) Incompatible ERP with new Hardware

A very common problem businesses face is when an ERP software is old and is not compatible with software requirements for new devices. Take the case of a new laptop wherein an old software will not load. ERP upgradation would hence be prudent to utilize the full potential of a faster processor.

7) Customer Experience Improvement

Companies nowadays seek to improve customer experience to differentiate from competitors. Digital tools like cloud-based ERP are at a company’s disposal to enhance this experience. Hence ERP upgrades to get the latest digital tools to support a better experience is the wise move for companies to differentiate and serve customer satisfaction.

8) Mergers and Acquisitions

Small to mid-sized business getting merged with acquired by giants in the game is now a common phenomenon. However, the ERP system for the small business is not equipped enough to handle the transactions of the acquirer. In most of these cases ERP needs to be upgraded to that of the parent company to ensure streamlined processes and smooth integration of systems.

What to upgrade to?

Based on the current software’s in the market, Microsoft Dynamic Business Central is the go-to software for upgradation. Business central can help businesses in the following ways:

1) Incorporate latest technology

The first impression of a busines is the user interface and the software used to run it. The latest the technology, the easier the interface to use and the happier the customer. Customer satisfaction is now the name of the game making Business Central’s worth weigh in gold.

2) New functionality with new version

Newer versions bring to the table new features and higher standards of productivity. Business central is compatible with all new devices the likes of iPad included so that productivity is not restricted to working in office only. Bugs fixed and added invaluable enhancements makes the new Business Central version the go to software to upgrade ERP.

3) Version Supported by Microsoft

Microsoft as a brand preaches latest technology to the extent it does not support older versions as newer ones are released. As critical updates in old version will not be available the security of a business will be exposed. This makes ERP upgradation mandatory to ensure Microsoft support.

To see how Business central works let’s look into the Food industry. ERP for food has changed the industry to its core. To speak volumes, Meat processing which since ages was done manually is now automated. From procurement to delivery to customer follow up ERP for food is a one stop for all solution. Customer relationship management, grievance handling and timely distribution, you name it Food ERP does it. ERP for food makes suppliers more accountable, transactions speedy and error free. The customer service standards and the productivity companies attain have gone up a notch all thanks to Food ERP.

Determining when and how to upgrade ERP is not as complicated as it sounds. What business needs is a structured approach and a roadmap for ERP upgrades. The first step for a business is to identify the aim of ERP upgrades and see if the upgrading partner fits the gap. The next step is to select a partner like Microsoft Dynamics who makes this upgrade a smooth and speedy process. Third and the last step is to do run trial runs, assessment test and train your staff to get acquainted with the upgrade to reap its benefits. A clear-cut business objective and a partner to help you get there is all what a business needs to start an ERP upgrade. At minimal risk with sustainable rewards, ERP upgradation is what tips the scales in favour of the best over the rest. For if long term growth and profit is the end, ERP upgradation is the means to this end.

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