Rise from Obsolescence: A Course for ERP Success

How you can safeguard your company if your manufacturing software is discontinued.

White paper on obsolete ERP systems

Receiving notification that your ERP system - the software on which your business hangs everything - has reached end of life generally would strike fear into the hearts of management. (If it doesn't, it should!).

This happened recently for many Sage customers when they announced the end of life of Sage Manufacturing. While a replacement system may be available from the same vendor it should not be a foregone conclusion that you implement it, as it is likely to require the same effort to implement any system and won't necessarily deliver the same functionality that you had before.

When that notification lands on your desk, your first priority should be to ask, ‘How long do we have left for support?’. The moment your system is no longer supported you are at the mercy of luck. Should the system go down irreparably, that’s it. According to Gartner Group, 43 percent of companies shut down immediately after a major loss of computer records, and another 51 percent closed permanently within two years - leaving only 6% trading. Therefore, it’s paramount to place the utmost importance on deciding on what to replace the old system with.

It’s important to remember that this notification often follows years of upgrades, maintenance and consultancy costs, with vendors often trying to obtain as much revenue from the existing system and assuming that the customer will automatically migrate to the new one, due to the mistaken view that it’s not as large a migration process. Spoiler alert: It’s generally the same.

Case Study: An electronics manufacturer had replaced their old manufacturing system to the latest version only to be told shortly afterwards that it too was being retired. They chose to move to 123insight in 2008 and have been a customer ever since.

The Data Illusion

When vendors bring out an entirely new system it will generally have a completely different data structure beneath it. Therefore, your data won't just lift from one to the other - it will effectively be a fresh implementation. So, in addition to paying for the replacement software you'll also be paying again to move your data from one system to another.

Data transfer is often seen as one of the key barriers when migrating systems, with companies mistakenly thinking that it will be easier to stick with the same vendor rather than having to painstakingly reshape and reformat their data before inputting into the new system. 123 Insight solves this with its data import toolkit option, providing migrating companies with a series of clear, straightforward templates for Excel that allow you to easily organise your data before simply importing it into the system.

Stick or Twist

Ultimately, you must decide whether to stick with your current vendor or switch to an alternative system. We have already established that data will not simply drop from the old system neatly into the new one, but functionality is also likely to be different. When you dig into the detail it is possible that the vendor's replacement system may not meet your needs.

The best approach is to treat the whole exercise as an opportunity for overall improvement, and when reviewing the replacement system from your current vendor it should be considered in the same light as any other system. At this point you don't know its functionality, and you cannot assume that the new system will work exactly like the old one.

Architecturally sound

It's also important to consider that either replacing or migrating systems may also require a hardware infrastructure upgrade, especially if your system is particularly old and/or on another platform. If you are already on a Windows-based architecture, the main considerations you will have will relate to OS version and available CPU/RAM/HDD.

Case Study: A company producing silk-screened electronic keyboards previously relied on an ageing AS/400 system. It failed, and they were only able to get it up and running again by borrowing spare parts from a customer that ran the same system. The maintenance cost just to keep the old system running was £16k per year on top of the hardware and OS support costs. They moved to 123insight and instantly gained cost savings with the all-inclusive subscription only costing similar to the cost of maintenance of the previous system alone.

Opportunity to merge

In addition to the core ERP system, many companies often develop smaller systems to handle issues like quality management. Replacing the ERP software gives you the opportunity to re-evaluate how these satellite data systems are handled, and it may be that a replacement can more elegantly handle some of these disparate systems.

Take time to assess which other systems might fall into this category, and identify time and costs spent using and maintaining them. It may be that this adds significant justification for selecting one system over another if it can cover more of your business.

Evaluating new systems

The first step is to start the evaluation process of replacement systems. Create a checklist of required functions, remembering that newer systems may have an alternative or better way of doing things than your previous system, so do review anything that is different with an open mind.

123 Insight has streamlined and simplified this approach, starting with its two event types. Companies can attend either the 50-minute online INFO Exchange, which gives a taster of what a manufacturing system should be doing for your business, or the more in-depth Evaluation Workshop, held either online or in local venues around the UK. At 2½ hours, it goes into much more detail, and allows companies to be in a position by the end of it to confirm 123insight's suitability. Both events are free, and attendees also get a paperback copy of 'How to implement a manufacturing system', which details best practices and pitfalls when implementing MRP/ERP.

While the discontinuation notification might seem like a major threat to your business, it may turn out to be a hidden opportunity.

Removing the risk

With most systems you need to order (and pay for) a system before you have any guarantee that it will truly be suitable for your needs. 123 Insight further removes the risk by offering their 6-day training under no-obligation. Companies can attend on the understanding that if they choose not to move forward with 123insight they walk away with nothing to pay (and with a lot more knowledge). After that, they simply register for the number of required licences, which can be increased or decreased monthly, and start the implementation process for a fixed fee and a dedicated implementation mentor from 123 Insight.

Summary

While the discontinuation notification might seem like a major threat to your business, it may turn out to be a hidden opportunity. New features, improved workflow processes, the ability to retire other standalone systems and potentially even lower costs long-term could be what your business needs to be more competitive. 123 Insight's free to attend events are an ideal way to explore greener pastures with the minimum of time and expense investment.