When it comes to ERP systems, “upgrade” can sometimes be a four-letter word. They have a reputation for being expensive, time-consuming, and creating little value. Historically, ERP upgrades were seen as a mandatory exercise driven mostly out of fear: Fear of product vendors discontinuing support; fear that skills needed to support older versions were becoming hard to access; fear that remaining on the current version might result in unexpected, difficult-to-solve problems.
Times have changed and customers are looking to create value with ERP upgrades. It’s a big investment, not just to upgrade the software itself, but to upgrade core business processes and workforce skills to use newer versions. Expectations of tangible ROI are becoming the norm, and so they should be.
In a new series of articles this spring, we want to examine the evolution of Microsoft Dynamics NAV upgrade projects and how NAV 2013 R2 has the potential to change the discussion from one of fear and apprehension to one of opportunity and optimism. Let’s start by looking at some of the most common questions we face with our clients. These topics will provide the basis for more detailed discussions to come.
Q: How does upgrading to NAV 2013 R2 generate tangible ROI?
We are starting to see some interesting things that might not have been factors in past upgrades. For example, compliance and risk management are coming up more often. In one situation, our clients’ auditor had identified their NAV 2009 implementation as a material risk and they recommende an upgrade as a mitigating strategy. NAV 2009 support ends this year and in this case the client had ported all kinds of old code from prior versions into the current systems without cleaning it up properly.
The most common situation is that companies grow and their needs change, sometimes very quickly, and the current implementation may not be supporting today’s business needs very well. ERP systems don’t automatically adapt to companies’ changing needs, and at a certain point stakeholder intuitively know that investing in the old system makes little sense. We see companies doing business across new channels, adding product and service lines, and requiring deeper or different business insight than what they needed when NAV was deployed. Closing the capabilities gap is a major motivation because the latest version of NAV offers more standard functionality than ever before. It is usually possible to ditch customizations in favor of standard NAV.
Q: What about the cloud? Is it a factor to consider when planning a NAV upgrade?
Absolutely it is. Even as recently as early 2013, midsize business were just beginning to entertain the notion of moving to the cloud. The advantages weren’t as clear as they are now. “Cloud-first” describes the mentality today; there are fewer and fewer good reasons to host enterprise software with on-premise hardware. Migrating on-premise NAV implementations to cloud datacenters offers more reliability, better performance, lower cost-of-ownership and ultimately peace-of-mind. With Microsoft Windows Azure cloud services as one prime example, enterprise-class hosting is a simple pay-as-you-go utility.
Q: How has the underlying technology and application evolved? What technology benefits does upgrading NAV offer?
NAV 2013 is really a night-and-day different ERP platform than any of its predecessor versions. The RTC (role tailored client) offers major productivity benefits with a familiar Microsoft Outlook style user interface and navigation and native Microsoft Office integration including the ever-popular Excel copy and paste.
The OData web protocol provides an accessible alternative to SOAP-based web services for querying tabular data. OData enables a new level of data integration and interoperability across a broad range of clients, servers, services, and tools.
And of course, the ability to integrate NAV with Office 365 opens up a range of new use cases ranging from light user access for routine transactions to robust dashboards and analytics.
Q: Okay, so we are ready to upgrade. Isn’t it a complicated process?
No two NAV implementations are quite alike, which makes generalizing about upgrades challenging. Each unique scenario needs to be carefully analyzed and upgrade paths considered carefully. A technical upgrade can make sense when there are few customizations or in cases where business requirements haven’t changed much since the initial deployment or the functionality in the existing deployment. This scenario is rare from what we see. Even when companies tell us things haven’t changed, digging a little beneath the surface usually points to new needs.
Technical upgrades can be straightforward if you are moving from NAV 2009 to 2013. Moving from NAV 5 or earlier can be problematic as the upgrade needs to be performed sequentially with discrete testing at each stage and that can be onerous.
On the other extreme, we have found that reimplementation represents a faster, more certain approach to upgrade with less investment and risk. These are cases where extensive customizations exist and multiple version hops are required. In almost every case we’ve looked at, custom code in the current NAV implementation has become obsolete and does not require porting to NAV 2013. Most often we are finding that standard NAV functionality has come so far that customizations can be retired and replaced with configuration driven functionality. In other cases, business needs have simply evolved or ISV capabilities may no longer be needed thus a re-implementation can represent an amazing opportunity to have a fresh start at significantly lower cost than a technical upgrade.
Somewhere in between technical upgrades and re-implementations there are numerous hybrid scenarios that effectively recycle existing customizations into a fresh implementation foundation. In these cases, organizations have some custom functionality that must be ported to NAV 2013 but otherwise stand to benefit from new standard features, re-design of the dimension model and clean data. It’s the best of both worlds.
Q: Great, so there are multiple upgrade paths. How do we figure out which is best for us?
The starting point is a detailed analysis of the current implementation, identifying exactly how many custom objects exist. This put things in context and frames the discussion that follows which is really an examination of exactly what each custom object is for and whether it is needed going forward. Functionality that needs to roll forward is then assessed against NAV 2013 features to determine if the business need can be addressed through configuration or ISV solutions. It’s always better to use standard features supported by Microsoft or an ISV than customize. Once the scope of a customer’s business requirements is fully understood, we can recommend an appropriate strategy for upgrading NAV. In many situations customers are overdue to revisit their dimension structure, reporting and business intelligence approach and it is also a great time check in on the hosting and infrastructure plan. Once these details come into focus, the upgrade path usually becomes pretty clear. Significant differences in investment between the different paths usually dictate the choice. In the end the customer always ends up with a more robust solution than what they had before and an established set of priorities to evolve the solution over time to produce even greater benefits and organizational performance.
Q: Once an upgrade to NAV 2013 is complete, is there anything customers should consider to make future upgrades more streamlined?
The Microsoft Dynamics NAV team has moved from a 4-year major release cycle to an annual release cycle that will be more incremental and straightforward. As well, we understand from Microsoft leaders that after completing several years of technology and platform improvements, the focus for future changes will shift to application enhancements which means new functionality and capabilities. We think annual releases are a better model for a variety of reasons and Microsoft is really showing leadership in the ERP market here. While the jump to NAV 2013 may be a somewhat big investment, future upgrades should become virtually invisible, assuming there is a basic attempt to stay current and not fall far behind.
Staying current on BREP (Business Ready Enhancement Plan) is now more valuable than ever as Microsoft is pushing out updates and rollups almost every month. Organizations like Catapult are now offering a proactive support model that keeps solutions updated and maps new features to identified business needs. The shift from a disruptive upgrade every 4-8 years to a continuously evolving, always-current deployment model is a welcome change for our customers and perfectly suited to a cloud-first world.
By Elliot Fishman, CEO, Catapult, published April 8, 2014.
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