Why Pay Manufacturing ERP Annual Maintenance Fees?

In times of economic uncertainty, everyone naturally looks for ways to save money and cut costs.  As some annual manufacturing ERP system maintenance programs come up for renewal one might question the validity of expense.  What happens when you don’t continue to pay maintenance?  For most ERP users, be prepared to be shut-off from technical support as well as any current or future software upgrades.  In some cases, continuing to operate without technical support is not reason enough to justify the cost.  So that leaves the upgrades as the main driver for continuing to pay your maintenance fees.  So, are ERP software updates a big enough reason for paying maintenance?  It all depends on your system!

Let’s look at what happens if you don’t renew. If you are, as noted above, on a relatively new or “stable” version of the manufacturing ERP software, and you don’t have a very active marketplace that changes dynamically, then you might feel pretty comfortable hopping off the maintenance train. Your thought is that you will just maintain yourself with your current system and its current capabilities. You might even get your ERP provider to discount maintenance if you don’t take upgrades.  This may be fine for the time being but what if one of the dynamics of your world changes – like new customer growth with different demands, business upgrades that require new technology, obsolete hardware and operating systems, or new business expansion opportunities offshore.

The most significant of these is the changing dynamic of your customer base. Because, in today’s ever changing business world, even keeping your existing customers requires you to change and adapt to their needs – regardless of whether they have been with you 20 years or 20 minutes.  How will you keep up year-after-year when your core technology infrastructure does not keep pace? How will you implement new technologies when they don’t mesh with your existing outdated systems? The answer is that you will eventually fall farther and farther behind the curve against your competitors – who are keeping current with their technology – and this will then require you to eventually take one of two actions: start from scratch with a brand new ERP system or upgrade your existing system (and depending on how far behind you are it may seem like a new system anyway!).  Either option is likely to be more costly than having continued on maintenance in the first place.

But its not just all about getting updates. It’s about the quality of the updates. You need to look at this closely and see whether your manufacturing ERP software company is providing you a consistent path of development. With the consolidation of ERP systems in recent years many packages are being developed to fit certain niches within a company’s product offerings and not necessarily the original direction of the ERP system. Ask yourself whether the updates that are being provided fit the direction that your business is going and whether your ERP provider allows you input on the development for the update? You should ask yourself these questions when you think about shelling out the maintenance fees because it is important that your ERP system evenly grow with both the industry and the technology.

So once you have bitten the bullet and decided that maintenance is worth the money (and to be worth the money it must include frequent and useful updates!), how do you ensure that you get value for your maintenance dollars? You can bargain with your ERP provider for a lower maintenance rate as an option. But that will likely lead to cost cutting on the ERP provider side and a reduction in services and update quality. The answer is to find a manufacturing ERP provider with a reasonable maintenance rate where the updates are frequent, useful and relevant to your business needs.  Those manufacturing ERP software packages are out there and I would be happy to offer my top choice!