With companies continuing to expand their global footprint, it makes business sense to expand the technology and application footprint too, so that the complexities associated with globalization are taken care of.
While continued-support issues like non-availability of critical patch updates makes a strong case in itself for the need to upgrade to the latest available Oracle application release available in the market today, I believe the decision to upgrade to a higher release should stem from a more fundamental need like the additional business value that the new functionalities of the latest release promise to deliver.
IT heads are seeing an increase in requests from their users for an upgrade who want to leverage the enhanced functionalities of Oracle R12 and thus gain a better visibility into their mission critical business processes.
With premier Oracle support ending this November and extended support ending the next year, an upgrade makes a compelling case for the Finance teams as well, who would not be very willing enough to spend on extra maintenance packages and at the same time keep the users deprived of the tangible business benefits that the upgrade brings to the table.
For those who are wondering if an upgrade requires a huge upfront investment, you might be interested in reading this.
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.
