The ERP Mass Migration - approach with caution!

If you're using an ERP, this article is crafted with your future in mind, particularly over the upcoming five years. The race to the cloud by ERP vendors (and other enterprise systems providers) is reaching a fever pitch, with aggressive strategies to migrate customers to their cloud solutions - even if these solutions are not ready or fit-for-purpose.

This is a critical phase in ERP evolution, with every major player promoting their cloud software and promising seamless transitions so smooth, you might barely notice the change.

But this has all happened before! All the main vendors have released major platform upgrades in the past, and hoovered-up legacy software systems and attempted to move clients into their "new" ecosystems.

Those who experienced the technology upheavals of the 1990s and 2000s will remember the colossal effort to move through Oracle, SAP, Microsoft Dynamics, Infor and other ERPs. These were monumental undertakings, costing millions, taking years to implement, and causing significant disruption. It was a lucrative era for many, except often for the clients themselves.

We are witnessing a new (final?) "mass migration" in ERP, a comprehensive, large-scale shift in business technology. This involves a myriad of consultants and experts converging on an organisation to execute this transformation, with profitability firmly in their sights.

Clients find themselves at the epicenter of this turmoil, bombarded with sales pitches about the latest technological innovations. While some SIs genuinely work towards maximising client investments, others prioritise profit, posing a dilemma for businesses on how to navigate these waters without becoming prey.

It's precisely this conflicted market dynamic that led to SMC being founded, and it remains our mission today: client-side independent advisory and digital transformation leadership.

To safeguard your interests, consider these strategies:

Software Procurement: Purchase only the necessary software. Avoid the lure of seemingly beneficial add-ons and package deals that obscure individual costs. Maintain control over your software rights and ensure any required additional solutions are explicitly stated up-front. Are those critical add-ons from the "app ecosystem" maintained by a sustainable organisation?

Scope Management: Clearly define your project's scope. A vague Statement of Work (SoW) can lead to increased costs and extended timelines. Commit to delivering only what is essential.

Human Resources: Assign your top talent to the project. Business decisions should remain internal, with SIs providing guidance but not making decisions. Ensure key project roles are filled with named, dedicated personnel, avoiding the pitfalls of blended resourcing. Failing to do this is the single largest factor we see in poorly performing projects.

Financial Oversight: Demand transparency in costs, particularly for bundled services. Understand the breakdown of expenses and be skeptical of undisclosed third-party charges. Thoroughly review subscription clauses for hidden escalations and model the total cost of ownership over an extended period - watch out for the price ratchet!

Project Assurance: Engage a reputable Advisor to navigate through the project complexities. Establish strict control gates and document a comprehensive exit strategy, preparing for any eventual disengagement from your software provider.

In summary:

As we approach what might be the last great wave of ERP transformation, it’s imperative to critically assess and manage legal, commercial and technical risks before finalising any agreements.

The journey is complex, with potential conflicts of interest among SIs tied to software vendors. Your strategic approach will be pivotal in steering clear of the banquet table and charting a course towards a successful digital transformation.