Upgrade vs. Re-implementation: How to Update Your ERP Solution
Are you wondering whether to upgrade or re-implement when updating from Dynamics NAV to Dynamics 365 Business Central? Read this first.
If your organization is still using an older version of Dynamics NAV, an update to Dynamics 365 Business Central is likely in your future. Is it better to upgrade or re-implement your ERP solution when that time comes? The short answer is that it depends on a couple of factors. In this blog post, David Doyle, Director of Sales & Marketing of Kwixand Solutions, offers some insight into the differences between these two options and how to evaluate which is suitable for your organization.
Defining an Upgrade vs. Re-implementation
Typically, most mid-market cloud ERP solutions can run an automated process to upgrade the existing version of the software to whatever the next version is. When you perform this type of upgrade, the main thing is that the software does it copy over your data from the old version to the newer one. If there are any changes in the database between the two versions, there will be some facility to address those changes.
"Essentially, with this version upgrade, the end-user can continue using the updated software in the same way they used their previous system," explains David. "The idea with an upgrade is that the newer version will have additional functionality and capabilities that may deliver additional value to the business."
On the other hand, businesses also can re-implement the newer software. As the name suggests, a re-implementation involves installing or implementing the newer version of the software and setting up the database as an entirely new system. It also considers your existing business processes and configures the new system around those.
Deciding Between an Upgrade vs. Re-implementation
What is the age of your ERP solution?
One of the most common deciding factors is how old your existing ERP solution is. If you haven't been keeping up with version upgrades, you may find yourself using an extremely outdated solution. In these cases, a re-implementation may be likely. It can be challenging to simply upgrade your solution to the latest version as you'll have to upgrade your system through multiple versions before reaching the newest version.
David provides an example. "Say your business is on Dynamics NAV, and you have not been doing your upgrade every year or year and a half. When that is the scenario, a re-implementation of the software will likely deliver the most financial value. That's because, typically, you won't be able to jump from one version to another easily if there are enough updates between where your business is and the newest version. Each of those upgrades in the middle will require effort, which translates into time and costs."
What is the value vs. cost?
According to David, you should also evaluate the value vs. the costs when deciding to either upgrade or re-implement. The value businesses derive from a version upgrade is to get access to technical support from the vendor or ERP partner since most vendors and partners only support the current version of the software and two versions back.
While the newer version of the software will have greater capabilities and functionality, when considering a version upgrade, you need to keep in mind that you may not have access to those because of how your solution was configured previously. "That's one of the challenges to be aware of during the upgrade process," explains David. "The business may not get all the value from the new software when they do an upgrade."
In terms of cost, upgrades tend to be less expensive and quicker – provided that you are upgrading from a recent version of the software.
On the other hand, with a re-implementation, the first step is an analysis of the company's business processes. Has anything changed in your business over the years? What does your current software not support that your business needs? Have you built any Excel spreadsheets to track information that your system isn't tracking? "All those factors are analyzed during a re-implementation," shares David. "Then the new version of the solution is configured to take advantage of all those processes that the business requires, along with the new processes that they have been managing outside their existing software. Plus, they will be able to leverage the software's new capabilities."
Re-implementation can mitigate ERP erosion – which occurs when your ERP solution is too outdated, or your business processes have changed over the years.
What about customizations?
Businesses that have been using Dynamics NAV for a long time are likely to have many customizations in their system. This is often a sticking point for many organizations who would like to move to Dynamics 365 Business Central but are worried about the costs of rewriting all those customizations. While in those cases, a re-implementation is likely the better way to go, according to David, the costs may not be as high as they fear.
"Typically, we have found that around 30% of those customizations are written years ago and wouldn't be required anymore. This is because Business Central is likely to have those features and functionality already in its system," explains David. He suggests businesses should evaluate how their processes have changed and whether those customizations are still valid today for the other customizations.
📍 Read More: Should You Upgrade from NAV to Business Central?
If you're debating between a version upgrade or a re-implementation for your Dynamics ERP, ask yourself these questions to determine which method is right for your business.
How old is your ERP solution?
How many customizations does your solution have?
How have your business processes changed since you implemented your current software?
What is the value vs. the cost?
David stresses the importance of that last question. "You need to measure the cost versus the value of either an upgrade or a re-implementation. And one way to get started on doing so is having conversations with your ERP partner," he explains. "What is the true value of doing an upgrade vs a re-implementation for your specific business? How will you be able to measure this value? These are questions you should ask your partner."
At the end of the day, businesses should be asking their ERP partner to help them identify the potential value, and if they are not having these honest conversations or don't trust their partner, it might be time to look for a new one.
📍 Read More: How to Select the Right Microsoft Dynamics 365 Partner For Your Business
About Kwixand Solutions
Kwixand Solutions is a Silver Microsoft Dynamics 365 Partner, specializing in Dynamics 365 Business Central. Our team of experts help businesses across Canada and USA digitally transform and get the most value out of their systems. Whether you're looking to adopt Business Central for the first time, migrate from GP or NAV to Business Central, or need help with your existing Business Central solution, we are here for you. Book your free consultation today.