3 ERP Upgrade Misconceptions and the Best Practices You Must Follow

by:
on August 27, 2018

If upgrading your ERP system were easy, everyone would do it.

The labor, resources and risks involved in an ERP upgrade can be daunting for small and midsize businesses (SMBs). Without adequate preparation, upgrades can take upwards of a year to implement, potentially setting a business back hundreds of thousands of dollars.

But the simple truth is that delaying or avoiding an ERP upgrade can lead to a host of issues that can negatively impact a company’s bottom line. These include:

  • Increased maintenance costs
  • Exposing sensitive data to cybersecurity threats
  • Putting your business at a competitive disadvantage

So how can a company efficiently navigate an ERP upgrade while protecting the integrity of their data? Is it even possible? The answer is yes, if you take the right steps.

If your business follows the best practices in this article when upgrading its ERP software, it can reduce costs and implementation time by up to 20 percent, while maximizing workflow efficiency.

Common Misconceptions About ERP Upgrades

There are a number of reasons why so many businesses don’t upgrade when they need to. While some reasons are logical, more often than not, businesses avoid upgrades because of some common misconceptions.

But with the right amount of planning (more on that in a minute), upgrading your ERP software can be a relatively painless undertaking—and the benefits for SMBs will far outweigh any short-term pain.

Here are some common misconceptions about ERP upgrades:

They’re too expensive. The cost of upgrading varies, depending on the vendor, your existing infrastructure and the level of training, customization and maintenance involved. Implementation costs range from $50,000 to $500,000 for SMBs—which, without a doubt, is a serious investment.

But the subsequent boosts in efficiency, security and ease of integration make it a wise one. And when you consider how rapidly ERP technology is evolving, not upgrading (when your competition is) could be more expensive in the long run.

They take too long. This will, of course, depend on the scope and magnitude of the upgrade. Some can be done in as little as a few months, though the typical ERP upgrade takes between six months and a year, according to one Oracle study.

That might sound like a lot, but upgrade delays are almost always a consequence of inadequate preparation. Migrating all that data and integrating all those systems doesn’t happen overnight, but it shouldn’t take the better part of a year either.

They’re too risky. This isn’t as much a problem with the act of upgrading as it is the complexity of the task at hand.

ERP software is, by definition, designed to store a massive amount of data. Throw in a few business-specific customizations and some third-party software integrations on top of that data migration, and the ways in which an upgrade can go awry begin to mount.

The perils of ERP implementation failure are well-documented, but almost all of them stem from insufficient preparation.

Best Practices When Preparing for an ERP Upgrade

If you aren’t fully prepared, the likelihood of implementation failure skyrockets. But don’t worry—there are some best practices that can ensure a smooth, timely and cost-effective transition for your SMB.

Here’s what you need to do:

Define the Needs and Scope of the Upgrades at the Outset

Before anything else, provide your ERP vendor with a detailed needs document that spells out the specific requirements of your business.

Any existing modifications or processes need to be etched in stone (metaphorically speaking) before the upgrade commences; not doing so could delay the go-live date and cost your business thousands of dollars if something were to go wrong.

A needs document should include things such as:

  • Existing software integrations
  • Desired functionality
  • Access rights

In tandem with this needs doc, develop an internal itinerary for the implementation process. It ought to cover items such as:

  • Detailed data migration roadmap and timeline
  • Comprehensive pre-implementation checklist
  • Clearly delineated roles and responsibilities for each team member

Assemble a Dedicated Team of ERP Implementation Experts

Once you’ve assessed the needs and timeline for your upgrade, appoint an internal leader to oversee the project. Then, clearly define the roles for each team member, so as not to confuse the responsibilities of the individual.

Avoiding operational overlap is essential to a timely and successful transition, as is making sure you don’t neglect an important part of the transition. If you need to hire external ERP experts to assist with a particular process, do it: it’ll be a worthy investment in the long term.

Some examples of team roles include:

  • Project manager: Ensures implementation is delivered on time and on budget.
  • Application consultant: Drives effective communication between your business and the ERP software vendor, verifying that both sides’ needs are met.
  • Site coordinator: Exists on-premise at each deployment site to convey needs and deliverables to team lead.

Provide Your Team Members With ERP Upgrade Skills Assessments and Training

Lastly, but just as pivotally, conduct an in-depth skills assessment of every potential team member to ensure they have the expertise and wherewithal for their particular role.

Once the upgrade team is in place, educate each individual, no matter their experience or skill level, with the knowledge necessary to carry out their responsibilities. On-the-job training will inevitably disrupt the upgrade process—with potentially devastating effects that could derail the entire process. And nobody wants that.

Skills assessments and training should cover things like:

  • Technical abilities
  • Team-building exercises
  • Effective communication

Looking Forward: The Benefits of ERP Upgrades

Once you know what you need to do, how you need to do it and are well on your way to a sparkly new ERP system, you get to reap the benefits. They include:

A system that runs with optimal efficiency. This is the big one, as it’s the main reason businesses even use ERP software. Unless you’re upgrading to a lesser ERP (which would actually be a downgrade, if we’re getting technical about it), the new system won’t just be shinier—it’ll be better in almost every way.

Higher-quality ERP systems mean better tech, increased functionality, reduced IT costs and enhanced efficiency.

Confidence in the security of your data. Cyberattacks are constantly evolving threats, with attackers adept at finding new ways to exploit vulnerable systems and endangering private business and customer data.

Older, out-of-date ERP systems are particularly vulnerable; they just aren’t built to fend off the attacks of today, let alone tomorrow’s.

Upgrading your ERP will put your company in the best possible position to fend off these threats, so you can effectively safeguard your data with confidence and peace of mind.

Better integration with other software. Say, for example, your business uses an external accounting application in conjunction with ERP. Whenever you update that piece of non-ERP software, you’re increasing the likelihood of miscommunication between systems, putting your data and operational efficiency at risk.

In almost all cases, the more current the ERP system, the more likely it is to play nice with other software. This becomes even more crucial as more businesses migrate toward the postmodern approach to ERP.


And voila—you’re ready to upgrade! Easy-peasy, right? OK, maybe not so easy, but with a better understanding of what an ERP upgrade looks like and how to sufficiently plan for one, you can begin the process with confidence that you’ll succeed.

And because you can never be too prepared, feel free to peruse our ERP resources page for all things enterprise resource planning or give one of our trusty software advisors a call at 855-998-8505 for a free consultation.

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