What becomes of ageing technology - and its users?
By Ronald Laxton, MD of Computer Initiatives.
Nothing lasts forever, especially not in the information and communications technology industry. Even those enterprise systems that have delivered sound and dependable service over the course of 10 or more years, and which aren`t broken, may yet require replacement. That`s not so much a factor of their inadequacy, but rather an inevitable consequence of progress, which renders even the best systems eventually obsolete.
That`s according to Ronald Laxton, MD of Computer Initiatives. "The familiar expression of `if it ain`t broke, don`t fix it` doesn`t apply universally. If advantage is not taken of the new capabilities and possibilities that are emerging, your company could become uncompetitive. So, while your old ERP system may be functioning perfectly, it may yet impede business performance."
Or, more simply, emerging software models mean the ability to achieve the same - or better - business performance at far lower cost. That means reduced cost of production and quite possibly increased productivity, too.
But what becomes of ageing technology and, perhaps more relevant to those saddled with it, what of the users?
That is something Laxton has borne witness to over the course of a quarter of a century. "As systems approach end-of-life, a number of symptoms emerge, including fewer users and a big reduction in new implementations," he says.
The average age of the people working with the systems increases and it becomes harder to find the necessary skills as individuals update their CVs to secure employment on emerging platforms. "Older employees tend to be less inclined to face the challenges of learning new products, and so remain within the shrinking pool of resources," Laxton adds, noting that support costs are bound to increase.
Perhaps interestingly, even in the sunset years of a system, a mass exodus of clients doesn`t always manifest; the vendor may instead become a target for acquisition. "That`s primarily driven by the value seen in the client base; transition may then be encouraged through neglect of the acquired system," he explains.
In such scenarios, he says users should consider some questions to guide strategy: "It is worth investigating what a change of ownership communicates. What is the practice of the acquiring company? Has it acquired other products in the past? How has it developed those products? How has it integrated them with its existing stable of products?" The answers may be telling - and could provide valuable insight into the best way forward, Laxton asserts.
Surprisingly, he says that working with a system that is nearing end-of-life isn`t all bad news. "There are both positive and negative aspects; the extent to which it is suitable depends on the strategy and requirements of your business."
On the up side, he points out that older systems are often settled and therefore stable; any bugs are ironed out and for those companies that don`t need to change business processes, stability means lower cost of ownership. Support is easier, as users are familiar with the system; maturity also means depth of functionality and also depth of skills in the market (although the persons providing that support may themselves be ageing and more expensive).
The major disadvantage is the inability to take advantage of new ways of working; specifically, concepts like Web accessibility, cloud computing, better integration of value chains and the associated features of software as a service may be out of reach. "Difficulty may also result when using new technology in other areas of the business with the ERP system," Laxton adds, "while compatibility issues may result with new operating systems and other peripheral systems that have faster refresh cycles."
Ultimately, Laxton says it is as important to examine the reasons for making the decision to remain on older technology as it is to evaluate the case for moving to new. "What should be ascertained is whether or not the current system is inhibiting opportunities, and whether new technology will add value to the company. Will it save costs - and can new technology enable changes to the business that can boost performance?" The answers to these fundamental questions should guide the corporate ERP strategy.