“Portals, business intelligence those are applications that extend beyond what we would deem to be traditional ERP systems,” Bacon says. “The vendors have done a great job upselling to their existing client base.”
For the most part, the survey found that cost expectations hit the mark. Most (76 percent) respondents said the costs of upgrading met their expectations. On average, though, actual costs exceeded expected costs by about $100,000. The average cost of an ERP upgrade in this survey was $1.5 million or 18 percent of the cost of the initial ERP implementation.
The survey also found that small, incremental ERP upgrades drove costs higher. Larger upgrades (those that affect the most users) provided better economy of scale. Companies that were able to upgrade efficiently learned from their initial implementations, says Bijesse. In fact, most companies surveyed (65 percent) handled their through an in-house group.
“Undertaking a big, big project like that requires internal expertise,” Bijesse says. “Companies that were able to maintain competency in–house were in much better shape.”
According to the survey, the average upgrade takes about seven months from planning to the launch date. Planning consumes about 24 percent of the total time while testing requires another 22 percent. Testing was ranked the most difficult stage of ERP upgrading by 29 percent of respondents. Another 28 percent said data conversion/migration was the most difficult.
“The success of the planning phase determines the success of the overall project,” says Bijesse.
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