ERP mega-vendors Oracle and SAP churn out new and updated product versions in an endless cycle. However, each new release is almost indistinguishable from the previous one. There seem to be very few business reasons to move to the next release.
Many organisations are realising this and sticking to older versions. This trend grew in 2020, with Covid-19 forcing IT leaders to readdress their roadmaps and question: is the upgrade really worth it?
Why do organisations cancel IT projects?
The effects of the global lockdown were felt across almost all industries. Many IT roadmaps have been rerouted, with Gartner predicting an 8% decline in worldwide IT spending.
“CIOs have moved into emergency cost optimisation which means that investments will be minimised and prioritised on operations that keep the business running, which will be the top priority for most organisations,” said Gartner’s research vice president, John-David Lovelock.
CIOs are still investigating ways to sweat their existing assets and improve what they already have, rather than investing in upgrades. This shift in priorities led to large-scale IT projects being put on hold or cancelled.
Why are organisations still feeling the pressure to upgrade their ERP estates?
ERP vendors Oracle and SAP are still pressuring customers to upgrade their systems, through traditional tactics, and encouraging their customers to change product versions by increasing support and maintenance costs once existing products go out of support.
If a product is deemed out of support, it no longer receives mainstream support from the vendor and is no longer entitled to the full amount of services, such as security updates, legislative patches and bug fixes.
Oracle and SAP reduce support services on older versions, which means the only way for organisations to reinstate mainstream support is to upgrade.
The vendor’s logic leaves CIOs with a difficult decision to make: should they maintain current software and face rising support costs, or invest in an upgrade that will use internal resources and require change management for a product almost indistinguishable from the last one?
Either scenario undermines Lovelock’s observation that organisations have been prioritising emergency cost operation. Fortunately, there is another option.
Is an upgrade necessary?
Understandably, these organisations seek an alternative that benefits themselves, not their vendors. As a result, they are investigating switching to third-party support.
For example, Support Revolution helped ATU, Germany’s “No. 1 car workshop” owned by Mobivia Group, move its systems away from Oracle as the vendor increased pressure to upgrade. ATU’s estate was heavily integrated with other systems which meant upgrading would have compromised these links and incurred huge costs for a system that wasn’t going to be used going forward. Paying large support bills and under increasing duress, ATU decided to move away from vendor support.
Aware that transitioning from Oracle would be a lengthy process, ATU engaged with Support Revolution, thanks to the organisation’s proven track record for business-critical system support. Making the move to third-party support and avoiding Oracle’s upgrade meant ATU was able to extend the lifetime of its systems indefinitely and reduce its annual support costs by 50%.
By using Support Revolution’s managed service for its legacy systems, ATU has made significant cost savings, while avoiding reallocating vital internal resources. The organisation is now one step closer to achieving its end goal of seamlessly terminating its Oracle relationship, with minimal business disruption.
Maximise software’s potential
At a time when organisations should be saving money, vendors appear to want the exact opposite. CIOs and IT leaders are left caught in the middle and face the exact same options when the next product version is released.
But it is no longer a binary decision between upgrading or being left unsupported. CIOs now have the choice of switching to a third-party provider – a route that growing numbers of organisations are taking.
“Our support service enables organisations to step away from the vendor’s constant pressure to upgrade and escape the cycle, because even the organisations who do upgrade to the newest product will only ever face another inevitable upgrade further down the line,” says CEO of Support Revolution, Mark Smith.
In this way, third-party support offers a way out, enabling organisations to extensively customise software and remain supported, extend the licensing as needed, and add in applications and plug-ins to extend functionality such as AI and RPA.
Oracle and SAP like to rumour that an upgrade is the only option to access the latest technology. However, third-party support allows organisations to do all manner of things with their systems, still, for example, hosting on-premise systems in the cloud, without having to upgrade.