How about making “upgrade projects” as a part of your annual service model and bundle them into operating expenses budget as against capital expenditure spending? Companies who have invested in the right outsourcing models should challenge their vendors to reduce the intensity (or budget) of a typical R12 upgrade project. In other words the spending should be apportioned over 12 months or 24 months annual operating expenses instead of spending “huge project budget”. The ROI to spend significant amounts on functional features versus routine technical upgrades has lot of room for prioritization and spread the risk over several months at the same time get short term benefits. When you look at task level detailed project plans of many upgrade projects, there are at least 40% to 60% of the scope items that can spread over a calendar year or down load them to support & maintenance budget instead going for “project budget”. This will minimize risk for corporations and vendors will have better chances to succeed with flexible implementation schedules for non-prioritized items. Corporations burn huge amounts for expensive consulting hours in figuring out the scope of these projects but focus less on how to minimize the spending patterns to get better and real ROI.

In one of the recent surveys conducted in our webinar, one of the validation for the above concept is when people answered that they are not sure about the ROI as well as no bandwidth in house to start an R12 project. Companies spend millions of dollars upgrading their sytems and budget approvals for such initiatives are tough. People sharpen their pencils with ROI calculations and “how to convince the management” for a “CapEX” (Capital Expenditure Budget) approval. This is inspite of having large IT teams as well as vendors supporting their system in an “outsourcing model”. My earlier blog post mentioned “valuesourcing” as means of getting better ROI and “multishoring” is one of the tools to achieve the real value. Use these tools on your R12 upgrade.