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How to Set Up an Effective ERP Upgrade Strategy: Key Do and Don’ts

Since entering the mainstream about two decades ago, Enterprise Resource Planning (ERP) solutions have evolved tremendously to become inseparable business assets in the 21st Century. However, many businesses are yet to realize a profitable ROI on their ERP systems – a reason why nearly half of organizations plan to upgrade their solution in the near future. 

After implementation, there can still be widespread manual activities and endless spreadsheets in data-related tasks. This is not to mention low-quality business reports that may require extra workarounds to make sense to the executives. To avoid all these, you might want to consider an ERP upgrade. But what does a typical ERP upgrade project plan entail? And most importantly, what’s the ideal strategy for executing it? In this article, we explore a step-by-step process of setting up an ERP upgrade strategy. Keep reading to learn more.

ERP Upgrade Meaning and Benefits 

An ERP system upgrade involves an update or migration of an existing Enterprise Resource Planning solution from its current version to a modern one. During the process, several mini-projects can also be implemented on the sidelines, including system reconfiguration, data migration, bug fixes, integrations, and user training.

Primarily, organizations upgrade ERP systems to: 

  • Improve system performance: ERP upgrades focus on fine-tuning the solution to optimize overall performance in terms of speed, scalability, and stability, allowing for the handling of increasing user concurrency and data volumes. 
  • Enhance functionality: an elaborate and successful upgrade plan introduces new features and updates to the system, improving functionality in terms of productivity and implementation of dynamic business requirements. 
  • Integrate with modern/cloud tools & applications: unlike a legacy ERP system, a new version will integrate seamlessly with modern business applications, allowing convenient data exchange and interoperability across the organization.    
  • Improve decision-making: with an upgraded Enterprise Resource Planning solution, you can tap into real-time reporting and analytics capabilities to understand the exact pain points of your business, ultimately improving decision-making. 
  • Compete favorably: upgrading an ERP system translates to a competitive edge since the strategy future-proofs the organization’s IT infrastructure, leapfrogging the competition in terms of technological advancements.

When Should You Do an ERP Upgrade? 

Deciding when to implement an ERP upgrade plan is a big task, given that the strategy’s impact will cut across all departments in your organization, from finance to global business operations. So, what scenario warrants you to initiate an upgrade plan?  

  • When the Business is Growing 

In this case, you’ll need an upgrade to ensure that the system is capable of handling future business requirements. Signs of a growing business include an increasing number of transactions, new products & services, and penetration into newer markets.   

  • If You’ve Outgrown the Legacy System 

Legacy ERP software can limit your business in many ways. For instance, it may be slower than the competitor’s, not to mention the inability to integrate with modern solutions. Additionally, you might find it challenging to hire personnel who can operate and maintain it.  

  • If You’re Facing Problems with Regulatory Compliance

As consumer needs continue to change, so do compliance regulations and requirements from governments and oversight bodies. Upgrading your ERP system will not only introduce stronger data controls and functionality but also mitigate risks beforehand to ensure the organization is in sync with the dynamic regulatory landscape. 

Why You Need an ERP Upgrade Strategy 

While switching to a new ERP upgrade plan brings a ton of business benefits, doing so without laying down a proper strategy exposes your organization to inevitable consequences, such as less scalability and compromised efficiency. In fact, Gartner estimates that the failure rate of ERP implementations can be as high as more than 75%

Here are the reasons why you need an effective ERP migration strategy before initiating an upgrade: 

  • Implement the Project with a Clear Roadmap

Having a strategy allows you to implement the ERP upgrade process, following a clear roadmap that meticulously outlines the steps and timelines needed for success. In a broader sense, this also helps you set clear expectations and ensure a structured approach throughout the project.  

  • Allocate and Plan for Resources Effectively 

With a clear ERP upgrade strategy, you can accurately estimate the total budget required for successful implementation. This includes accounting for hidden ERP upgrade costs, such as data migration and cleansing, post-upgrade support, and monitoring, as well as user training and change management. 

  • Test and Validate the Plan Before Full-Scale Implementation 

An all-around software upgrade ERP strategy includes an elaborate testing and validation plan to ensure the newer version functions as intended. For instance, it can highlight test scenarios for functionality, compatibility, or overall performance, helping you identify and remediate issues before it’s too late. 

Should You Upgrade or Replace ERP Software? 

Choosing whether to upgrade or entirely replace ERP legacy systems ultimately depends on an organization’s unique needs and business position. However, there are some important factors to consider before making that decision, including: 

  • Technical feasibility: If the current system aligns with the present and future requirements of the organization, upgrading it might be a viable option. However, if critical functionalities are missing, including technical support, a replacement may be necessary. 
  • Cost: evaluate the costs of either strategy to determine if they are within your budget. Typically, a replacement is more expensive than an upgrade because it requires additional costs, such as licensing fees and data migration. 
  • Integrations and customizations: how much do you want to customize the system, and which integrations do you want to implement? In case the level of customization is extensive, you might want to consider a replacement for a clean start. Conversely, upgrading might be an option if the customizations can be easily modified for compatibility with the target version.

9 Steps in Upgrading an ERP System to Include in Your Strategy 

Whether you’re upgrading system functionality, speed, or overall performance, an ERP solution is a mission-critical system, and the process requires thorough planning and meticulous execution. Here are 9 important steps in upgrading an ERP system: 

ERP Upgrade Strategy Roadmap - ModLogix

1. Align Business and Strategic Goals 

Liaise with all executives in the organization, from the CEO to CFO to ensure that the planned ERP upgrade aligns with business and strategic goals. Additionally, you’ll need the approval of these people for budgeting and overhaul of certain business functions or operations. 

2. Define Your Scope and Budget

The next step involves defining the scope and the budget of the project. This means establishing the specific parts, modules, or features of the ERP that require an upgrade. In terms of budgeting, factors to consider include hardware and software costs, licensing, consultation fees, and contingency. 

3. Identify the Pain Points and Benchmark 

Which exact business points are you trying to solve by upgrading the ERP? Is it poor data integration, a financial loss, or lower user adoption? Whatever it is, note down and benchmark extensively to determine if it will be solved with an upgrade.  

4. Talk to the Frontline Users 

After identifying the business points, talk to the frontline users to understand the routine business processes that will be impacted by the upgrade. That way, you can ensure these processes are uninterrupted post-deployment. 

5. Choose your Approach and Modernization Partner

The choice of approach and modernization partner depend on a range of factors, including the nature and complexity of the project. If you want to implement all changes simultaneously, you might want to use a big bang approach, or phased approach for iterative changes. Also, you’ll need to decide whether you’ll work with the ERP provider, an inhouse team, or third-party modernization company. 

6. Create a Feasible Implementation Plan 

An ERP upgrade is a significant change that doesn’t only take your time and money but also impacts the core operations of your organization. With that in mind, create a feasible implementation plan beyond the vendor’s “perfect-world” scenario and factor in all your intricate business needs. 

7. Handle Data Mapping 

While some vendors may provide data mapping tools, the onus of implementation lies with you. This is because the vendor focuses more on the data within their system and not your organization’s – so prepare to handle it all the way. 

8. Educate and Train Users 

Educate and train all levels of users within the organization on how to use certain functions and the benefits of leveraging the upgraded version. For instance, tell them how it simplifies their work. 

9. Validate Results and Evaluate Performance 

Lastly, you need to test and validate the newly upgraded ERP, as well as evaluate its performance to determine whether it functions as intended. During this stage, watch out bugs, glitches, or any other technical inconsistency that might tamper with security, functionality, or performance. Whatever you find, document, report, and remediate it before full-scale deployment.  

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How Not to Fail the ERP Upgrade Strategy 

Now that you understand the ERP upgrade meaning plus how to set up and execute the strategy, how do you ensure that you don’t fail? Well, here is an ERP upgrade checklist for success: 

  • Is the upgrade the right business decision going forward? 
  • Is everyone in the company okay with the upgrade plan? 
  • Do you understand the current state and future needs of your organization? 
  • Do you have a business-ready project team to implement the upgrade? 
  • Is your execution plan feasible and cost-effective? 

Leading ERP Providers and Their Upgrade Plans 

Among the reputable ERP providers with competitive upgrade plans include:  


As a runway market leader for ERP services, SAP offers an all-around upgrade through its SAP S/4HANA cloud plan. The service provider recommends various requirements for SAP ERP upgrade, including a minimum hard disk of 10GB and a Quad Core i7 CPU. However, for production applications, you’ll need enough hard disk space of at least 40GB to handle all the log files. 


Oracle offers various levels of upgrades for its E-Business Suite (EBS) for improved user experience, enhanced functionality, as well as advanced security and compliance. For ERP Oracle upgrade projects, the service provider recommends the following requirements: 

  • Release 11.5.9 base CU2 and 11.5.10 CU2
  • Release 11.5.9 bas, 11.5.9 CU1, 11.5.10 base, and 11.5.10 CU1
  • Migration of the Oracle to at least Oracle 10g Release 2


Microsoft ERP upgrade allows your organization to integrate with the service provider’s extensive suite of tools, including business intelligence (BI), supply chain management, and human capital management. However, before upgrading, you must meet a range of requirements, including: 

  • Upgrade of the Tier 2+ Standard Acceptance Test sandbox environment 
  • Data upgrade in development 
  • Applications hotfixes 
  • An updated Integrated Vendor Software (ISV) solutions 

However, it’s important to note that while service providers offer a way for users to upgrade ERP systems, their service goes as far as selling the newer version of the software. In reality, you might need technical assistance during the upgrade, especially when it comes to customization. In that case, you might want to involve reputable ERP upgrade or migration partners, such as ModLogix. 

Why Hire a Professional for an ERP System Upgrade

While it can be tempting to upgrade an ERP system at the in-house level, hiring a professional to do the job will not only increase the chances of succeeding but also ensure a smooth transition post-deployment. This is because professionals bring in robust expertise and experience to handle any project, whether Oracle, Microsoft, or Sage ERP upgrade. 

In addition, professionals understand the technical know-how of ERP project planning and management to ensure that you face minimal downtime or disruptions during implementation. For instance, as an experienced IT modernization partner, ModLogix can help you implement an ERP project successfully using a range of methodologies, including SCRUM, Kanban, and Waterfall. This is not to mention executing other technical tasks that require a professional approach, such as data cleansing, validation, and migration. 


Upgrading an ERP system allows your organization to integrate with modern technologies and harness new business opportunities without necessarily rewriting the solution’s code. However, during implementation missing even one crucial step can result in failure, loss of money, and frustrations, regardless of whether you’re upgrading the system, replacing it, or implementing it from scratch. We hope this guide gives you a detailed outlook on how to execute your strategy from the start to the end.  

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