Is Your Company Suffering From ERP Erosion?
- Kwixand Team
- 4 days ago
- 6 min read
Updated: 3 days ago
Learn more about ERP erosion and how your organization can mitigate the risks.
How much value are you getting out of your ERP solution? Is your organization truly leveraging the full potential of its ERP system in 2026?
Many organizations assume that once an ERP system is implemented and maintained, it will continue delivering value indefinitely. However, if you've noticed that your ERP solution is no longer meeting your business needs the way it once did, that is likely a result of ERP erosion. ERP erosion (also known as application erosion) occurs when there is a gradual but noticeable decline in the system’s functionality that is actually being utilized over time.
In simple terms, ERP erosion occurs when the value of your ERP system gradually diminishes, often without organizations realizing it until inefficiencies, workarounds, and reporting gaps become the norm.
For organizations running long‑standing ERP platforms, ERP erosion is often accepted as “just the way the system works today,” rather than recognized as a sign that the business has outgrown the platform.
In this article, we'll cover:
Why Does ERP Erosion Occur?
Why does this happen? According to Jens Baun, Director of Sales at Kwixand Solutions, the most common reason is that businesses evolve, while their ERP systems often do not evolve at the same pace.
Consider this: A typical company keeps its ERP software for a decade, and many organizations continue using the same system for much longer. Even when companies diligently apply patches, upgrades, and enhancements, the reality is that business processes rarely stay static for 10–15 years.
"Either the core business processes will have changed, or the services and products, their market, customers, suppliers, or equipment," explains Baun. "The bottom line is businesses change over time. And you find yourself struggling with an ERP system that was implemented to support how your business worked 10 to 15 years ago."
This is particularly common for Dynamics GP users, where the system was often implemented years ago and heavily customized to support legacy processes. As the business evolves, those customizations and configurations become increasingly misaligned with how the organization operates today.
Another common reason ERP erosion occurs is the loss of institutional ERP knowledge within the organization.
"During an implementation, you typically have internal champions or power users who are trained up well and know how to use the ERP system to support their business processes," explains Baun. "As primary users, they understand the system as a whole extremely well."
As time passes, those power users may retire, move into different roles, or leave the organization—taking deep system knowledge with them.
The Role of Training in ERP Erosion
In many organizations, ERP training is treated as a one‑time event rather than an ongoing initiative. New hires are often trained informally and shown how to complete specific tasks rather than being taught how the ERP system works holistically.
This means that many employees receive little to no formal ERP training at all. Instead, they rely on “over‑the‑shoulder” training, outdated documentation, or trial and error. While this may keep operations moving in the short term, it significantly accelerates ERP erosion over time.
As a result, employees underutilize the ERP system or avoid it entirely for certain tasks. Excel spreadsheets, standalone reporting tools, and disconnected third‑party systems become the default.
This leads to data silos, inconsistent reporting, and manual reconciliation—reintroducing problems ERP systems were designed to eliminate.
"At the end of the day, people are going to find a way to do their jobs," says Baun. "And if that means opening up an Excel spreadsheet because they don't know how—or there's no clear way—to capture certain data in the ERP system, they are going to do just that."
📌 Read More: When Should You Replace or Upgrade Your ERP System?
What Are the Common Signs of ERP Erosion?
If you're wondering whether your company is experiencing ERP erosion, ask yourself the following questions.
Has your company’s business model or core processes significantly changed since your ERP system was first implemented?
Do you have a formal ERP training or onboarding program for new hires?
Are employees relying heavily on Excel spreadsheets or external tools to analyze data or complete key business processes?
Do decision‑makers believe your ERP system is incapable of supporting certain operations or reporting needs?
Are you running a significantly outdated version of your ERP software?
Is your current system approaching—or already past—the end of mainstream support?
If you find yourself answering “yes” to one or more of these questions, your organization is experiencing ERP erosion.
How ERP Erosion Impacts Business Performance
ERP erosion doesn’t just affect IT teams; it impacts the entire organization. As systems become misaligned with business needs, employees spend more time on manual workarounds, leadership loses confidence in reporting, and decision‑making slows down.
Over time, this can lead to:
Reduced operational efficiency
Inaccurate or delayed reporting
Increased reliance on manual processes
Higher maintenance and support costs
Lower user adoption and satisfaction
For organizations running ERP systems nearing end of life, these impacts often intensify as the system becomes harder to evolve.
How to Mitigate the Risks of ERP Erosion
According to Baun, one of the most effective ways to mitigate ERP erosion is by continuously updating internal processes and ERP training documentation.
"This ensures your employees understand how to use the system, regardless of the version you're running—to properly support your business requirements," he explains.
However, in instances where companies are still using legacy systems such as Dynamics GP, training and process updates can only go so far if the platform itself is no longer evolving to support how the business operates today.
This makes it critical to assess not just how the system is being used, but whether it remains the right system at all.
Dynamics GP and ERP Erosion: When Product Lifecycle Change
For many small and mid-sized organizations, Microsoft Dynamics GP has been a reliable on-premises ERP for finance, distribution, and operations. But like all business applications, GP is governed by a product lifecycle, meaning there comes a point where vendor investment, support, and the surrounding ecosystem start to shrink. That time has arrived for GP as Microsoft officially announced the end-of-support for Dynamics GP.
As Microsoft continues to invest in Dynamics 365 Business Central as its modern ERP platform, GP users face a critical inflection point. While GP may still be running, the system is no longer evolving in ways that align with modern business expectations around cloud access, automation, reporting, and integration with other third-party tools.
This “maintenance‑only” phase accelerates ERP erosion as:
Third-party ecosystem shrinkage: As vendors and independent software providers reduce investment, add-ons may stagnate, integrations break more often, and replacement components become harder to source.
Workarounds replace core functionality: Users export data to Excel or separate apps for budgeting, approvals, inventory planning, or reporting, creating duplicate sources of truth.
Knowledge loss accelerates: As experienced GP users leave, and fewer new hires have a Dynamics GP background, process knowledge gets reduced to “steps” instead of understanding end-to-end workflows.
Security, compliance, and audit pressure increases: The cost and complexity of staying compliant rises, and teams may respond by limiting change, further eroding system usefulness.
As new requirements are handled outside the ERP system and customizations add risk instead of value, this accelerates ERP erosion. When any ERP system approaches end of mainstream support (and eventually end of extended support), the issue isn’t just “IT housekeeping.” It becomes harder to stay current on security requirements, keep integrations running smoothly, and find people who know the product well. At this stage, organizations are often deciding between prolonging ERP erosion or using this moment to reset their ERP strategy altogether.
When Re‑Implementation or Migration Makes Sense
In some cases, mitigating ERP erosion requires more than incremental improvements. Organizations may benefit from a partial or full re‑implementation, where the system is reconfigured to support how the business operates today rather than how it operated years ago. For Dynamics GP users, this assessment often leads to a broader conversation about a GP to Dynamics 365 Business Central migration. Business Central provides:
A modern, cloud‑first ERP foundation
Continuous updates instead of major upgrade cycles
Native integration with Microsoft 365, Power BI, and Copilot
An opportunity to eliminate legacy workarounds and technical debt
Rather than carrying ERP erosion forward, migration allows organizations to rebuild ERP value for the next decade.
Has Your ERP Software Kept Up with Your Business?
An ERP solution is typically the backbone of an organization, supporting its most critical processes and operations. If you are not leveraging the full potential of your ERP system, it may be limiting efficiency, visibility, and growth.
If you are experiencing ERP erosion, the team at Kwixand Solutions can help. We are ERP consultants and Microsoft Dynamics 365 Partners based in Vancouver, Canada. We help organizations modernize their ERP usage, increase adoption, and get long-term value from their systems. We also bring deep experience helping GP users assess their ERP health and transition to Dynamics 356 Business Central when the time is right.
Get in touch with us today to learn how we can help your company by ensuring you get the most value from your ERP solution. Book a consultation today or get in touch directly at info@kwixand.com
