Is the ERP Life Cycle Changing?

Over years, there seems to be a “norm” that an ERP life cycle will run from seven to ten years. That lifecycle may end because ERP vendors have added more and better functionality or because our needs have changed. Likely the answer has always combined some of each. With the expansion of ERP’s remit in modern businesses, combined with a consumer demand for the latest technological “must-have”, has the ERP life cycle become shorter?

Sometimes you have to change. Your old ERP vendor is out of business. Your legacy ERP system has been customized over customization many times over the years and no longer can be maintained.

Unless the above is true we can extend the ERP life cycle by keeping up to date on all the vendor’s updates. If our vendor does a good job when improving the system using modern technology and adding features that benefit our business there is no reason to change. Keeping our hardware current is also important. What use is a fancy mobile ERP app when all the companies mobile devices are now officially antiques?

Bells & Whistles

So what has changed? The ERP system we bought ten years ago included some complete accounting system and systems for production planning and inventory control. Maybe more, but the systems were pretty basic then compared to today’s offerings. Newer ERP software offerings will have all the old functions with many added features such as CRM, SCM, PLM, and HCM. Systems today include quality control and assurance benefits that we had to go outside of ERP to get yesterday. Business intelligence was available by downloading data to a spreadsheet or other system outside of ERP. You could automate the process using external tools. Now, BI is one of the most powerful components of a modern ERP. Assuming your vendor has updated every facet of your ERP system , and assuming the cost of this has not been passed to you the consumer, then your ERP life cycle will remain the same. But that is a lot of assumptions.

ERP is a set of tools you use to help manage your business – nothing more. It would be rare to start on a new implementation only because a vendor now has some new bell or whistle to offer. But your business is constantly changing and evolving to provide better products and services for your customers who also are evolving. Your ERP tools need to evolve too. If it is time to upgrade your competitive advantage or to implement some best practices or to reduce your costs, it is time to upgrade your ERP tools to manage those changes.