Suppose the ERP system that is used in your organization does not have a future. For example, because development has stopped, sales are stagnating, or support has been terminated. But the system works great for you. Should you worry then?
Product life cycle of ERP systems
Like any other product, ERP systems go through several stages in their life cycle:
- Development: the software is being developed, a new ERP package has been born
- Introduction: the software is brought to the market and sales starts
- Growth: sales is booming, the number of users is growing, and new versions follow each other rapidly
- Maturity: growth stagnates, support is widely available, but there are no more new releases
- Decline: sales are dropping, because the software is no longer needed, is outdated or because the competition offers better alternatives.
It is in the Decline stage that the product is on a dead end and is ultimately end-of-life. Sales are falling, it becomes clear that the ERP package no longer has a future and the end is near. In the Decline phase, the system can still work extremely well for your organization and even be the best option for you at that time. And with the purpose of a bright future, you can calmly take the time to orient yourself for an alternative solution. No reason to worry, right?
Risks of end-of-life ERP systems
That is not entirely true. As soon as you know that an ERP solution is on a dead end, a number of risks arise, also for your organization. And over time, those risks become larger:
- Security: the security requirements to software evolve quickly. With end-of-life ERP software you run security risks that can have serious consequences.
- Legal requirements: changes in legislation sometimes require changes to the software. Think about changes in payment transactions or tax rates. You MUST find a way to deal with that.
- Incompatibility: Office 365 is being used by more and more organizations, but you may still be working with much older Word and Excel files. How long can you keep on doing that?
- Limitations: with end-of-life ERP software you will encounter more and more limitations. What the competition can do, is out of reach for you or you cannot do it as well or as quickly.
- Higher costs: All the above will cost you money. To prevent security risks, to comply with new legislation with a work-around and working less efficiently than the competition. It brings up costs and endangers the competitive strength of your company.
"The risks of end-of-life ERP systems cost money and endanger the competitive strength of your company."
Is your ERP system end-of-life?
So, you want to know if the end is near for your ERP system. But that is not always being communicated to you. However, there are enough signs that will tell you this. For example, when there are no new releases for a long time, support and training are limited or stopped, or requests for new features are no longer or less frequently accepted. The way your ERP partner does business also tells a lot. Does your ERP partner now focus on completely different systems and industries? Or have the sales and distribution rights of the ERP system recently been sold to another partner or an investment company? Time for action. For a start, you can ask for the product lifecycle policy. Then you know how long your version is still supported, often with a distinction between extensive and limited support.
Would you like to know more about Dysel's product lifecycle policy? Let me know and I will contact you.
Teun Arts is Service Manager at Dysel and it is his job to ensure that customers make optimal use of the software, now and in the future.