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Rip & Replace vs. Upgrade & Embrace – Is There A Third Way?

May 13, 2019

Flexible aPaaS solutions give enterprises the ability to replace the foundation of their IT infrastructure without having to “rip and replace.”

Every enterprise relies on complex networks of software infrastructure — the heart of which typically consists of an ERP. But as industry-wide digital transformation takes hold, businesses are finding that their legacy ERP systems aren’t up to the task of managing emerging technologies and capabilities. Many ERPs have, quite literally, fallen behind the times. Indeed, Forrester estimates that about half of businesses with ERPs are two versions out of date.

Meanwhile, the shift to flexible, scalable XaaS cloud software has left behind many on-premises, older ERPs that can’t compete with the scalability and features of cloud services. But ultimately, whether they’re on-premise or delivered over the cloud, many enterprises today are actively pursuing ways to implement more technologies, collect more data, and develop more capabilities  — and they’re increasingly coming up against the wall that is their ERP and the networks of enterprise software add-ons that spider out from it.

When these companies hit the wall, they typically come to a decision:

 

The Eternal Enterprise Software Conundrum

Do we rip out our existing software infrastructure and replace it with something that meets our current needs? Or do we re-instrument and repurpose our current system with integrations, connectors, and add ons?

For executives, the top objective of ERP overhauls is quick access to high-quality information that can better support strategic decision making. Good enterprise software fits good enterprise workflows — not the other way around.

But what happens when an ERP really doesn’t work as it should? The worst-case scenario is that software meant to streamline operations does the opposite, inhibiting productivity and incurring financial losses. This scenario is typical when, for example, businesses use multiple incompatible systems that produce data silos and force teams to work outside of pre-defined workflows. In other cases, businesses might simply be running systems that are too old, but which they can’t afford to replace.

Business leaders today recognize these ERP integration challenges. Some 58.5% of surveyed executives say their ERP landscape is “unnecessarily complex” — most say they have multiple ERP systems with disparate infrastructure platforms. For some 85.5% of businesses, it would be problematic to integrate their system with a newly acquired business, which suggests a barrier to growth. At a certain point, enterprise IT departments have to make a choice about what to change, and how.

 

 

Rip & Replace

One drastic choice is essentially to raze the system. Think of your ERP software as a building: too many crumbling walls, leaky pipes, and precariously-constructed additions, and starting from scratch may be the optimal option. The rip and replace strategy is generally a last resort when workarounds (“upgrade and embrace”) have failed. In this case, enterprises are tasked with getting rid of existing systems and implementing a brand new enterprise software solution.

That can mean more than closing up shop on current software. It affects massive stores of data and disrupts internal processes. It can even mean getting rid of all manner of current IT infrastructure, including physical servers, hardware devices, and sensors, in favor of cloud solutions.

Obviously, rip and replace comes with a fair number of challenges. First of all, it can be ruinously disruptive to business, and many operations can’t weather the kind of IT blackouts these operations require. Secondly, the cost can be prohibitive, not least because businesses are naturally hesitant to lose the investments they’ve made into their legacy systems, including customizations, integrations, and institutional know-how. Plus, implementing new software often incurs significant costs in terms of time, capital, and human resources. At the same time, rip and replace is a high-risk move since it’s not clear that the replacement system will work any better than its predecessor.

 

Upgrade & Embrace

With the upgrade and embrace ERP overhaul strategy, enterprises retain existing systems while working to patch problem areas and extend its capabilities with internal development and/or external integrations. Some IT departments may be able to find workarounds by staying on top of upgrades and incorporating ERP connectors that cover gaps in functionality. Building flexibility on the foundation of old infrastructure is a major challenge — not an impossible one, but certainly not as “clean” as it could be. In this case, you keep much of the existing “building” but add additional floors one by one, in a patchwork solution. This approach preserves the original investment and avoids the hassle of tearing down the whole building to start anew.

The upgrade and embrace method doesn’t mean avoiding disruption or expense. Upgrading enterprise software systems can introduce new opportunities for error and requires retraining users. Adding functionality to systems for which they were never designed should be expected to incur outsized resource requirements.

Further buy-in to legacy systems can be pricey and can make future changes even more difficult. In other words, the longer you delay “rip and replace” with “upgrade and embrace”, the harder it will be to start fresh when the time inevitably arrives. And you still haven’t addressed the basic problem, which is that many old systems were designed to perform different functions for a different time. Eventually, upgrades won’t be enough.

 

Rip-Replace-Upgrade-Embrace

 

A Third Way

At this point, enterprises with legacy software systems have to recognize that their existing infrastructure is sub-optimal. The market has changed; technology has changed; customers have changed — ERPs haven’t changed enough. It’s hard to compete against the upstarts and companies who’ve found a way forward with new, differentiating IT solutions.

But clearly, neither of the above options are an ideal solution. Starting fresh with a totally new system is a costly expense that just isn’t feasible for many organizations on the timeline we’re talking about. Upgrades work for a while, but ultimately just lock the organization into what they already have, whether or not it’s the optimal solution. IT departments and business managers may find themselves at odds over what constitutes the best way forward, but it’s clear that something has to change.

Now we come to the third option: implementing an application Platform as a Service designed to connect the dots between the wild west of unwieldy legacy enterprise software systems. aPaaS solutions designed to integrate extensible data from legacy systems provides a way for enterprises to not just “get all the data into one place” — they provide these enterprises with a platform on which to build the tools that they actually need. Metaphorically speaking, these systems effectively replace the foundation of the building without tearing the whole thing to the ground.

The right tool will pull the information out of legacy software systems and create a new foundation of extensible data on which a new stack of flexible, agile services and tools can be purpose-built for what businesses need to do today (and tomorrow).

What an aPaaS can and will do will differ from one organization to the next. And that’s precisely the benefit of an aPaaS solution. It isn’t an out-of-the-box, one-size-fits-all product because when we’re talking about enterprise software solutions, it necessarily can’t be. Instead, aPaaS solutions build in just the functionality that all enterprises tend to need, and allow individual enterprises in every vertical to build the last mile that tailors their software infrastructure for the way they actually do business.