Companies typically spend 15-20% of their software license fees on maintenance and support each year. Given the 10- to 15-year average lifespan of ERP investments, license costs are often eclipsed by maintenance costs in the long-term. So it's understandable that companies like you would want to reduce these costs. However, here are three reasons to think carefully before canceling your ERP maintenance contract.
- Inability to upgrade your software. Once you cancel your maintenance contract, your organization will generally be ineligible for automatic upgrades. ERP vendors spend significant sums of money on R&D to incorporating best practices from their client bases, so there may be opportunity costs and lost business benefits associated with canceling your maintenance.
- Business operations become frozen in time. Because upgrades and support stop when the maintenance contract is canceled, it becomes very unlikely that you will change the system to keep up with the evolution of your organization. As a result, your business needs are likely to become misaligned with the functionality of the software. This misalignment may accelerate the need to completely replace your ERP system, which can be more costly than the savings from reducing annual maintenance.
- Proliferation of workarounds outside the system. Because of the first two reasons, users are more likely to become frustrated with the system and start adopting their own business processes and workarounds outside the ERP system. This will generally decrease user satisfaction with the system and undermine business benefits. Companies generally make significant investments in enterprise software implementations to take steps forward, so regressing backwards can damage your overall return on investment.
So even though the cost of maintenance fees may stress you out, it’s definitely worth it in order . Microsoft offers the most flexibility and greatest ROI for your maintenance and support dollars. Contact us here to find out how Microsoft Dynamics ERP can help you. We are a Gold-Certified partner serving customers in the Mid-Atlantic area offering hosted and at very low monthly rates. Whether you need , , help with your supply chain, or business management solutions for , SSi is your total solution provider.
By: Karen Riordan, SSi Consulting,
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You make a very good point. All software has bugs no matter how big or small the software system is. Many times people find ways around these bugs in order to continue with day to day operations. These work arounds certainly do have a way of getting ingrained in to an organizations processes. Even sometimes to a point where when the bug is fixed the organization will still use the work around. It is very important for software vendors to be timely in fixing bugs and flawed functionality. It is equally important for businesses to stay current in order to benefit from these improvements.