Swapping out an ERP is probably the scariest thought on earth to an IT director. But at the recent Workday Rising, there were a large number of ERP users seriously thinking about such a switch. I talked to several: and let’s look at the pros and cons as they reviewed the challenges and risks.
I recall the wisdom of a comment from Tracy Jones, at the time the IT manager at the Department of Energy's Sandia National Laboratory in Albuquerque, N.M.: “Don't be the first one on the block to install the latest release.”
He was referring to his organization’s installation of a major ERP provider’s software that was taking about a year longer than expected to complete because of problems IT staffers found with earlier versions of the software. I suspect his warning still remains pertinent to today’s potential upgraders.
To date, the ERPs have been on-premise client-server architectures. The draw for many at this event: the move to SaaS with predictable cost of ownership over the long term – and no more fork-lift upgrades. These companies have invested millions in their current ERPs, and now face product upgrades within the next 12 months.
One large customer estimated that an entire ERP upgrade for his firm could well be a $4.5 Million project. While many at the Workday event are solely looking at their human capital management and financials solutions, the cost, effort, and time to upgrade is still very significant, making the allure of "never upgrading again" pretty compelling. Oft-heard here was the compelling phrase “on time and on (or under!) budget” from existing users for their new deployments.
Workday customers who had made the move from prior ERPs were for the most, satisfied customers, stating that the migration from, for example PeopleSoft, had to be carefully planned for, but worth it in the outcomes and savings they achieved. Medtronic (the medical device company) users, as one example, maintain part of their multinational installation running in parallel on PeopleSoft until a total conversion to Workday occurs. The issues for many involve testing a tremendous number of customizations they have made before they can switch.
Upgrading an ERP
So what goes into the upgrade decision and why is there such a very long time between an upgrade release and the date customers go into production?
Here are the steps required:
You will notice that the preponderance of these plans are virtually identical to the planning that goes into effect when considering a totally new business application. (Upgrade time is when companies switch vendors.)
And of course, no one makes a software decision solely on the delivery method—that would be silly. The central question is always: does this meet my business requirements? Yet consideration of the pros and cons of upgrade with “the devil we know” and a new business environment both require very much the same thought processes. And now may be just the time to begin that evaluation. Oracle, SAP, ADP, NorthgateArinso, NetSuite, Ultimate and many other vendors now offer end-to-end HCM and ERP solutions in the cloud.
For our assessment of Workday’s newly announced features, please see Josh’s blog of Tuesday, November 06, entitled Workday drops the Other Shoe(s): BigData Analytics, Recruiting, and Extensible Objects.
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Dr. Katherine Jones brings years of experience in HR and Talent Management and the technologies
that support a productive workforce. She writes about the technology ecosystem's
use in improving people management for optimal business results.
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