Suppose the ERP system used in your organization no longer has a future. For example, because development is no longer happening, sales are stagnant, or support is even discontinued. But the system works fine for you. Should you worry then?
Product life cycle of ERP systems
ERP systems, like other products, have a number of stages in their life cycle:
- Development: the software is developed, a new ERP package is born
- Introduction: the software is marketed and sold
- Growth: sales are increasing, the number of users is growing and new versions are rapidly following one another
- Adult: growth is stagnant, support is given extensively, but no more releases follow
- Downfall: sales drop because the software is no longer needed, outdated or the competition is better.
It is in that Downturn phase that the product hits a dead end and is eventually end-of-life. Sales are declining, it becomes clear that the ERP package has no future, and the end is coming. The system may still work extremely well for your organization in the Downturn phase and even be the best option for you at that point. And looking to the future, you can take your time to explore an alternative solution. Nothing to worry about, right?
Risks of end-of-life ERP systems
That's not entirely true. Once it is known that an ERP package has reached a dead end, a number of risks arise, even for your organization. And those risks are increasing:
- Security: software security requirements are changing rapidly. With end-of-life ERP software, you run security risks that can have serious consequences.
- Legal requirements: changes in legislation sometimes require changes in software. Think about changes in payments or tax rates. You MUST keep up with that.
- Incompatibility: Office 365 is being used by more and more companies, but you may still be working with a lot of older Word and Excel files. How long will that last?
- Restrictions: with end-of-life ERP software, you're going to run into more and more limitations. What the competition can do, you can't do or can't do as well or as quickly.
- Higher costs: All of the above are going to cost you money. Covering security risks, meeting new legislation with a work-around, operating less efficiently than the competition. It will cost you and put your company's competitiveness at risk.
"The risks of end-of-life ERP systems cost money and jeopardize your company's competitiveness."
Is your ERP package end-of-life?
So you want to know when the end is near for your ERP system. But it's not always announced. However, there are plenty of signs that give it away. For example, when there are no more releases for a long time, support and training are reduced or discontinued, or requests for new features are honored less and less often. The actions of the ERP partner are also telling. Does your ERP partner focus on completely different packages and industries? Or have the sales rights to your ERP system recently been sold to another partner or an investment company? Then it really is time to act. To start with, you can ask about the product lifecycle policy. Then you will know how long your version is still supported, often with a distinction between extended and limited support.
Want to know more about Dysel's product lifecycle policy? Let me know and I'll get back to you.
Teun Arts is Service Manager at Dysel and ensures that customers make optimal use of the software's capabilities, now and in the future.
