The charts below represent the results of a survey by the
Aberdeen Group asking ERP decision makers about their plans for an ERP upgrade.
What is wrong with these charts? It’s not a trick question –
if you’ve identified nine questions that shouldn’t make sense when applied to
your business, you’ve hit the bull’s eye!
Rather than focusing on your core competency, if you are spending
too much time asking the following questions of your ERP
Is it time to upgrade? Can I afford it? Which
customization/integration will break? How many additional resources will be
Am I being charged way too much for maintenance
and support and not getting adequate value?
Should the ERP solution be replaced?
And, if these are things you know but simply do not have
answers to i.e., known unknowns, read further since it’s probably time for a
deeper reflection about your ERP system.
The reason I am starting this post in reverse and not by
outlining the compelling benefits offered by a cloud
based business system such as NetSuite is, I am hopeful that when companies
look at the questions and responses in the charts above, they will learn not
only from the mistakes of other companies but also their own.
Almost half the companies surveyed by the Aberdeen Group cite
a fear of disruption to the business as a reason for not upgrading their ERP
systems. Moreover, customizations make upgrading cost prohibitive. This can be
a drain on the resources of organizations trying to use capital creatively to
grow. Additionally, the resources needed to support an ERP solution may also be
One instinct could be is to rush to sign up with a
third-party maintenance/support provider to slash costs. However, some organizations
may not have the same clout as large companies and unable to negotiate favorable
maintenance opt-outs from the traditional ERP vendors. Experts also caution
that going the third party route involves possible monetary penalty by the
enterprise software makers, if and when a client chooses to go back to
vendor-provided maintenance or at the time of software upgrades. Factor in
issues like skill sets, commitment, or if/when a vendor sunsets a solution,
trusting a third party organization to maintain an ERP solution can be a risky
proposition. These are things you simply do not know – unknown unknowns!
One of the key benefits of cloud based ERP is that upgrades
are performed automatically by the vendor. With cloud computing, there is a
single code base and the vendor utilizes a managed version upgrade process to
minimize disruption. Customizing ERP
applications in the cloud is a lot faster and easier than on-premise because
the code base is standards-based instead of proprietary. As a result, whenever a cloud application is
upgraded to a newer version, customized components are carried over to the new
version seamlessly without the need for any painful code retrofitting. Since
the ERP customizations are critical to your business yet do not automatically
migrate to the upgraded version, it dramatically increases the cost and
complexity of upgrades with on-premise ERP.
Since 100% of NetSuite customers are on the latest version of the software, it eliminates the version-lock
problem associated with on-premise ERP systems. NetSuite upgrades software two times a year
migrating customizations to the newer version thus enabling customers to take
advantage of innovations delivered with the upgrade. Many companies
have eliminated costly ERP upgrades by deploying NetSuite with benefits
that are practically impossible to match with traditional on-premise ERP
systems. These are things you (now) know
that you know – known knowns!
Other NetSuite benefits include:
Deployment: Cloud infrastructure enables deployment of mature,
full-featured ERP without additional IT resources.
Enabled: Multi-subsidiary enabled, used in 100+ countries across 190+
Customization: Tailor the system to your businesses processes without
compromising upgrades. Customizations migrate automatically with every upgrade.
Integration: Prebuild integration with other legacy systems through
respected partners including Informatica, IBM, Cast Iron, and Dell Boomi.
-Anand Misra, Sr. Manager of Product at NetSuite