Five Secrets Software Vendors Don’t Want You to Know – and Why They Matter

As CEO of Third Stage Consulting Group , I’ve seen firsthand how technology vendors often dominate conversations about digital transformation, software advancements, and cloud migration. They push their products as essential upgrades, promising efficiency, modernization, and success.

But there are crucial things vendors would rather you not know—realities that can drastically impact your organization’s technology investment. Here, I’ll share five "dirty little secrets" software vendors keep under wraps and why taking an independent, technology-agnostic perspective is essential for organizations navigating digital transformation.

In addition to my summary below, you can also watch my video on the topic here:

1. Arbitrary Deadlines for Software Upgrades

One common strategy vendors use to drive revenue is the imposition of deadlines that push organizations to upgrade to the latest software versions. This tactic has been around since the early days of tech and is primarily designed to migrate customers in sync with new product offerings, minimizing support costs for outdated versions. However, the transition to cloud-based platforms has taken this practice to new levels. For example, SAP has set a 2027 deadline for clients to migrate from legacy systems like ECC to S/4HANA, claiming they’ll no longer support the legacy systems after that date.

What many don’t realize is that these deadlines are arbitrary and driven by the vendor’s interests, not necessarily what’s best for your business. Vendors often frame these deadlines as essential to “stay current,” but the reality is that they’re often meant to lock you into a new product cycle.

I advise companies to make upgrade decisions based on their own timelines, priorities, and risk tolerance—not the vendor’s agenda. Just because a vendor sets a deadline doesn’t mean it must be followed. Consider your operational readiness, budget constraints, and competing priorities before jumping into a forced migration. If an upgrade doesn’t align with your goals or budget, explore other options.

One such option is third-party support, which many organizations overlook. Many vendors who set these deadlines are aware of third-party support providers but don’t promote them because they can’t monetize that choice. Third-party support providers can often extend your software’s lifespan, providing support and maintenance until you decide the time is right for you. Not only does this flexibility reduce pressure, but it also gives you more control, letting you dictate your terms in digital transformation.

How to Make Arbitrary Deadlines Work for You

To make the most of this flexibility, set your own deadlines based on a roadmap that considers factors like:

• Internal Change Readiness: If your team isn’t prepared for a shift, the forced adoption of new software won’t yield positive outcomes. Create a phased plan, ensuring each department has the training and resources necessary for a smooth transition.
• Cost Analysis: Forced upgrades may come with significant costs that vendors rarely mention upfront. Consider the upgrade cost against your ROI timeline to ensure that the move makes financial sense.
• Risk Assessment: Every technology shift carries risks. Before committing to a vendor-driven timeline, assess the risks that come with both the upgrade and the potential of staying with your current system longer.

2. The Myth of the Silver Bullet Solution

Vendors frequently market their solutions as silver bullets, claiming they can resolve operational inefficiencies, simplify processes, and minimize implementation risks. But in reality, there is no single solution capable of eliminating all digital transformation challenges. Even the most advanced systems won’t solve underlying issues without a strategic approach.

When vendors promote their software, they often frame it as a one-size-fits-all solution. This framing can be misleading because every organization has unique challenges and priorities. In my experience, it’s rare to see an implementation that doesn’t require significant customization and change management to align with an organization’s needs. Moreover, vendors rarely discuss the trade-offs, risks, and additional investments needed for successful integration and adoption.

Technology alone doesn’t create transformation; rather, it’s the alignment of people, processes, and goals that drives meaningful change. A new ERP or CRM system, no matter how advanced, cannot single-handedly address organizational challenges or change processes overnight. Furthermore, each technology decision involves a choice of risks. Companies need to be honest about these trade-offs, assessing each option’s risks, costs, and potential ROI. In my experience, “No technology decision or tool set will make implementations and transformations easy. The key is to assess risks objectively and be clear on the true cost-benefit of technology investments.”

The Reality Behind Silver Bullets: Customization and Complexity

For a solution to truly fit your needs, it will likely require some degree of customization. However, customization adds complexity, time, and cost to the implementation process—factors vendors often downplay. Be prepared for the additional steps needed to make the technology work for your business, including:

• Detailed Process Mapping: Map your current processes and workflows before diving into a new solution. The solution’s out-of-the-box functionality may not align with your processes, requiring customization.
• Dedicated Change Management: Implementing technology affects people, and proper change management can make or break the success of a rollout. Consider training, ongoing support, and a communication plan that addresses employee concerns.

3. Technology Isn’t the Root of Most Failures

Through my work as an expert witness on failed digital transformations, I’ve seen countless projects where the technology itself wasn’t the primary reason for failure. When software projects fail, the underlying causes are often non-technical. Misalignment between technology capabilities and business processes, inadequate organizational change management, and lack of clarity around operational objectives are common reasons for failure.

The reality is that new technology alone won’t make up for a lack of strategic alignment. Implementations tend to be smoother when an organization invests more in change management, process mapping, and a shared understanding of project objectives. For example, many organizations fail to define key performance indicators (KPIs) that align with the technology rollout. Without clear metrics, it’s difficult to measure success and make the necessary adjustments along the way.

I recommend that companies invest more in non-technical areas like business process reengineering and organizational restructuring to support new technology. The technology component is comparatively easier to handle than the change management and process optimization necessary to make it function effectively. Operational, structural, and procedural changes can be some of the toughest challenges in digital transformation. These non-technological changes are essential for any meaningful value realization from a software investment, yet they’re often overlooked or underestimated, resulting in costly failures and unmet expectations.

Practical Tips to Avoid Failure

To avoid these pitfalls, consider these approaches:

• Establish Clear Goals and Objectives: Align your project with clearly defined business outcomes. Ensure that all stakeholders understand the project’s goals and how success will be measured.
• Invest in Process Design and Redesign: Define your future-state processes before technology implementation begins. This preparation can mitigate issues and reduce the need for time-consuming adjustments later.

4. Tech Advancements Outpace Organizational Readiness

The tech industry operates at a rapid pace, introducing AI, RPA (Robotic Process Automation), business intelligence, and advanced analytics. Vendors invest heavily in these advancements, eager to stay ahead of the competition and deliver the latest tools to their clients. But for many organizations, even foundational technology upgrades like cloud migration are still works in progress.

Attempting to adopt every available new technology without a solid foundation is a recipe for failure. I advocate for a phased approach, where companies gradually introduce technology improvements to their operations and focus first on core areas that need refinement. It’s not necessary—or advisable—to keep up with every technological development just because it exists. An incremental approach enables businesses to prioritize their people and processes, create momentum, and build a foundation that can support future, more advanced technologies.

The Incremental Approach: Building a Foundation for Future Success

A phased approach to technology adoption can prevent overwhelm and mitigate risks. Consider the following:

• Prioritize Core Capabilities: Focus on essential functions that support your organization’s objectives, instead of trying to adopt every new tool at once.
• Build a Digital Roadmap: A comprehensive digital roadmap identifies short-term and long-term initiatives, prioritizing those that provide a solid foundation before moving on to more advanced technology.

5. Over-Reliance on a Single Vendor Creates Risks

Another risk lies in over-reliance on a single vendor. Vendors often encourage organizations to invest deeply in their platforms, bundling multiple products and services into a single ecosystem. While this may seem advantageous from a pricing and negotiation standpoint, it can also lead to “vendor lock-in” and create long-term risk.

When all systems are tied to one vendor, the flexibility to make changes in the future is severely limited. Additionally, vendors can—and often do—raise prices on their subscriptions, which directly impacts companies reliant on their platforms. For example, Microsoft recently announced significant price hikes, ranging anywhere from 8 to 177%. The more integrated your systems are with a single vendor, the more leverage that vendor holds over your company.

Organizations should carefully assess the long-term implications of vendor consolidation. Instead of putting “all your eggs in one basket,” consider maintaining a flexible architecture that allows for future changes. This diversification provides options and keeps vendors accountable, ultimately reducing the likelihood of being forced into disruptive and costly transitions.

How to Protect Against Vendor Lock-In

To avoid becoming overly dependent on one vendor, consider these strategies:

• Opt for Best-of-Breed Solutions: Mix and match tools from multiple vendors, choosing the best fit for each specific function within your business. This approach reduces dependency and provides flexibility.
• Consider Hybrid Architectures: A hybrid model allows integration with multiple systems, reducing the likelihood of vendor lock-in. Leveraging cloud and on-premise solutions can further support flexibility.

Lessons for Digital Transformation Leaders

These five secrets underscore an important reality: vendors have a vested interest in presenting their technology as the optimal solution, even if it doesn’t necessarily align with your unique needs and pace. By understanding these hidden motivations, you can better manage your digital transformations and avoid common pitfalls.

1. Prioritize Business Goals Over Vendor Timelines: Set your own timelines for transformation based on readiness and internal priorities, not on a vendor’s arbitrary deadline. With third-party support options, you can avoid unnecessary upgrades and focus on what matters most for your organization.
2. Be Realistic About Technology Capabilities: Vendors market their solutions as seamless and easy to implement, but real transformation requires considerable internal change management and process alignment. Recognizing this can prevent you from overestimating the role technology will play in your transformation success.
3. Invest in Non-Technical Aspects of Transformation: Change management, process optimization, and organizational alignment are the true drivers of a successful digital transformation. These non-technical components should be at the forefront of any project plan.
4. Implement Incrementally to Mitigate Risk: Rather than overwhelming your organization with cutting-edge technology, a phased approach allows for gradual adaptation and improvement, creating a solid foundation for future advancements.
5. Diversify to Avoid Vendor Lock-In: Relying too heavily on a single vendor can create future challenges. A more balanced, multi-vendor strategy protects against price hikes and adds flexibility to pivot as business needs evolve.

In a digital world driven by rapid innovation, technology vendors will continue to push for upgrades, migrations, and complete ecosystem investments. But success in digital transformation requires a strategic and balanced approach. The best path forward lies in being informed, cautious, and independent, aligning technology decisions with business priorities rather than vendor incentives.

For those navigating these complex decisions, Third Stage Consulting offers a Resource Center with insights on digital transformation strategies, vendor analysis, and industry trends. Each year, our Digital Transformation Report provides a comprehensive look at best practices, software rankings, and up-to-date advice for companies seeking independent guidance on their digital journeys. You can download this report for free and explore additional resources to support your digital transformation.