Strategy and execution of ERP upgrades.

• Author: Collins, Kurt
• Position: Enterprise resource planning

Most organizations have the beginnings of a new computer system implementation project mapped out fairly well. They carefully identify their needs, research the solutions available to them, and draft a comprehensive RFP to outline precisely what they would like to see in their "next generation" computer system. Then they organize evaluation committees, review dozens of proposals, and spend weeks or months laboring over their choice of software and implementation services vendors before they ever sign a contract. There is no question that government organizations take the task of system selection and implementation very seriously. However, the ongoing tasks that must continue long after the system initially goes live are less clearly understood.

Faced with the decision to buy or build their computer systems, public-sector organizations have increasingly turned to the growing list of software vendors providing prepackaged solutions robust in the functions specifically required in the public sector. This trend has been especially notable in the Enterprise Resource Planning (ERP) class of software packages, which handle accounting, payroll, procurement, and other central-office functions. Leading ERP vendors provide solutions which integrate cross-industry "best practices" with government-specific features such as encumbrance accounting and position control.

Part of an organization's investment in an ERP System includes the opportunity to take advantage of technical enhancements and business process improvements in future releases of the software. In fact, most ERP vendors will include several years' worth of upgrades at significant discounts when purchased initially with their software. Organizations should upgrade their ERP software to current releases as they are made available to reap the benefits of the new features, software bug fixes, and new emerging technologies.

Many organizations question the value of performing an ERP upgrade project. When they do decide to undertake an upgrade, a lack of experience may cause the costs and length of the upgrade project to approach or even exceed those of the original software implementation effort. This article reviews the tips and traps in the planning and execution of a successful public-sector upgrade effort.

The Business Case for an Upgrade

Successful software upgrade initiatives, like the original implementations that preceded them, should make solid business sense and serve an organization's mission. Therefore, before beginning an upgrade effort, it is important to analyze the benefits the upgrade project can provide in order to accurately weigh against the time and resources that the upgrade will cost. In essence, it is important to establish a business case for the upgrade project. Here are some simple steps to take in order to formulate a business case for the upgrade effort. While each of these factors may weigh differently from organization to organization, they all generally contribute in some way to the upgrade decision.

What Direct, Tangible Benefits Can the Organization Derive from the Upgrade Effort? This is the first question to ask when contemplating a decision to upgrade ERP systems. Generally, every organization stands to benefit from an upgrade project in the following ways.

* Eligibility for Help Desk Support. Virtually all of the major ERP software vendors provide service after the sale. In fact, most vendors seek to influence purchasing decisions based largely upon the quality and timeliness of their response to questions about functionality, implementation problems, and potential software bugs. However, a software vendor can only provide quality help desk support if they are experts on the version of the software application the customer on the other end of the line is calling about. Most software vendors cut off support on a given version of their software 12 to 18 months after the next version becomes available.

* Solutions for Outstanding "Bugs" or Design Weaknesses. Although most software vendors invest heavily in software testing before releasing new code to customers, it is unrealistic to expect that any software package will be error-free. The majority of software bugs are resolved and delivered either fix-by-fix, or all-at-once as part of the next release version of the ERP package. Either way, the organization must be on a supported version of the software to take advantage of these fixes.

* New, Expanded, or Improved Features. Perhaps the most obvious benefit derived from an upgrade project is the opportunity to take advantage of system functions that were added to the software after the original implementation was completed. When an organization purchases an ERP package, it is purchasing not only the knowledge and strength of the software vendor and the software code as it exists the day they sign up but also the future enhancements to the product. Software vendors are constantly improving their packages. If a customer neglects to upgrade, they are robbing themselves of a significant benefit on their original investment. The vendors invest time and resources to researching, developing, and testing new features. The new functionality is probably going to expand or improve upon automated business processes. New releases also...