I can actually hear you saying: “What??? It goes without saying that it would cost me money to upgrade my ERP (Enterprise Resource Planning) software. And obviously, it would cost me money to purchase new ERP software. But surely it would not cost me a dime to do nothing!”
In the course of this article, I will show you the costs associated with doing absolutely nothing. I will also prove to you that doing nothing can result in steep unforeseen costs. I will further prove to you that you should be factoring the costs of doing nothing into your decision-making process when it comes time to decide whether to upgrade your ERP software, purchase new ERP software, or … do nothing.
By the time I have finished, I believe you will have a clear understanding of:
The Cost of Doing Nothing (Instead of Upgrading Your ERP Software)
The cost of doing nothing is not calculated solely in dollars and cents. It is also a concept that challenges the idea that doing nothing protects the status quo. Again, I can actually hear you saying: “By definition, nothing about the status quo would change if I do nothing. Right?”
Wrong. In real-world situations, doing nothing has consequences. Doing nothing has ramifications that are often significant, even dire. For example:
Doing nothing is not how women won the right to vote.
Doing nothing would not have protected the status quo when Hitler invaded Poland, Austria, France, etc.
Doing nothing would not have eradicated polio.
In all of those situations, the stakes were high. The potential costs were high, in dollars and cents, and the quality of life, freedom, health, and perhaps even survival.
Does it sound like I am using extreme examples to make my point? And how does all this relate to the cost of doing nothing instead of upgrading your ERP software? I would point out that doing nothing, in other words, relying on outdated software to run your company, can indeed have dire consequences.
Example #1: Here is an example closer to the topic at hand.
When Windows 10 was first released, Microsoft analyzed the cost of upgrading from Windows 7 to Windows 10 along with Windows 10 compliant PCs versus doing nothing. And they found that “every PC older than four years can cost you more than $1,700 a year in maintenance, repairs, and lost productivity compared to a new Windows device, and leave you open to cyberattacks and data breaches that affect more than 50% of small businesses.”
What’s more, “New Windows 10 Pro devices with 7th and 8th generation Intel® vPro™ processors help you stay protected and productive on the go, with up to 25% greater time efficiency, up to a 28% faster startup on average compared to Windows 7, and a battery that lasts up to 3x longer than an older Windows device.”
To my mind, those statistics were and are pretty darn compelling. Would you agree?
But if those figures are not enough to convince you that doing nothing does cost money, then let us move on to another example.
Example #2: Performance of companies on latest ERP release vs. those that did nothing.
The highly respected Aberdeen Group studied the performance of companies that had upgraded to the latest ERP release versus those that did nothing. Aberdeen found tangible evidence of disparities across various metrics that would directly impact the bottom line.
Take a look.
| Average Performance of Companies on the Latest ERP Software Release vs Those that Did Nothing | Those on Latest ERP Release | Those that Did Nothing |
| Days Sales Outstanding (DSO) | 33.3 | 42.9 |
| Complete and on-time delivery | 91% | 87% |
| Internal schedule compliance | 91% | 86% |
| Inventory accuracy | 92% | 88% |
| Percentage of accurate financial reports | 96% | 89% |
| Percentage of time that information is received during the “decision window.” | 90% | 82% |
| Customer satisfaction | 93% | 88% |
Compelling? We thought so. Every percentage point differential can be translated into dollars and cents. For example, when shipping lines began increasing their prices during the pandemic, a 5% hike on a container from Hong Kong meant that a container that previously cost $10,000 to ship now cost $10,500. Negligible? Not for the importers who could not increase their prices to consumers.
And then, when port delays and other supply chain disruptions kicked in, the shipping lines announced an additional price increase of 10%, bringing the cost of that container to $11,500. At this point, importers were losing money on every container they brought in, and they were forced to decide how long they could stay in business.
That is the real world, dire situation that importers are facing today.
What Is Stopping You from Upgrading Your ERP Software?
Here at Strategic Systems Group (SSG), we speak on a regular basis with business leaders who know that an ERP software upgrade is the intelligent choice, and yet what we hear them saying is:
“Not right now.” or
“We’re in a holding pattern.” or
“I’m not ready to decide yet.” or
“We need more information.” or
“The timing isn’t right.”
Consequently, the only decision they are, in fact, making, if one can call it a decision at all, is to do nothing. Evidence and experience show that in almost all cases, that indecision costs them time, energy, money, and undue stress. Not to mention that doing nothing stifles growth and innovation.
I recently heard a story about a business leader who spent six months deliberating whether to move an executive team member into a new role. During this time of doing nothing, two other key executives quit. The cost of replacing those two executives alone was well over $800,000. It is an interesting anecdote that highlights how doing nothing can be costly for various reasons and in various situations and scenarios.
The Cost of Doing Nothing
We believe that as opposed to saying:
“Not right now.” or
“We’re in a holding pattern.” or
“I’m not ready to decide yet.” or
“We need more information.” or
“The timing isn’t right.”
You should be asking yourself:
“Are our employees struggling to do their jobs well using outdated ERP software? At what cost?”
“Are we losing our competitive edge due to running our company on outdated ERP Software? How much is that costing us?”
“Are we trying to make informed business decisions based on inaccurate data? At what cost?
Doing Nothing Costs Money
The numbers do not lie. Upgrading your ERP software to the newest release makes sense in dollars and cents. Whether you are currently running an outdated version of Microsoft Dynamics ERP or an obsolete version of Infor ERP, now would be a perfect time to consider an upgrade. Because every day you put it off is costing you money.
Call Strategic Systems Group (SSG) at (310) 539-4645 or reach out via our contact form today!
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