ERP : Version upgrades see a major issue

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ERP applications took the world by storm almost 2 decades back and till now, this is one business that still is able to show good growth even in these testing times. There are lot of reasons of why the organizations go for ERP even when they are relatively short in cash, but we will not go that direction in this article. We will talk about the version upgrades of ERP that are a necessity in a sense that the product provider company stops supporting the older version after some time and the customer keeps on losing on the new features that are available in the new version. Both reasons are big enough to upgrade your system to the next hot version available. Since I have spent a long part of my professional career in ERP world, I have seen multiple upgrades, implementations and even re-implementations, rollouts, smaller enhancements etc. and have witnessed that the money involved in all these projects is not small by any standard.

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Talking about upgrades, this is seen as an opportunity by many organizations to simplify their processes, add some new features, get rid of the customizations and so on but as long as they stick to these, their job is relatively easier. Trouble comes, when they decide to change their business entity structure in terms of chart of accounts. COA are the building blocks of the business entity structure in most of the ERPs, specially the biggest ones like Oracle and SAP. If an organization decides that it is high time they change their reporting chart of account structure along with the application upgrade, they know little about this fact that it might cost them a bomb and it might be more feasible to go for a re-implementation exercise instead of an upgrade.

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Why is this? Well, let us talk about Oracle Application's E-Business Suite. The chart of accounts in this application is part of their Key flex fields functionality that needs to be mandatorily defined when a new application instance is being set-up. Whole financial reporting structure stands on top of this KFF (Key flex field) structure. Now, the catch is that, once defined these can not be changed even if a single transaction has been done in the instance (even while testing it). This feature, though a feather in the cap of Oracle as it protects the business compliance, on the other side has devoured the application of flexibility and makes sure that any late changes can not be implemented.

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When the organization go for the upgrade and decides that they need to do away with their current COA or wants to merge with another instance with different COA structure, they are in one big soup as it is not easy. It is not that, there are no solutions for it. First solution, as I said earlier is that go for a re-implementation exercise and they will get an opportunity to replace the stale processes, make them more efficient, increase automation, reduce customization, merge or de-merge businesses etc. The second solution is go and check if their is a way they can can change their COA. Yes, it is possible and I remember couple of products came into market some time back that offered doing it. If I am not wrong, one of them was crystallize (which was renamed as Applimation and then bought over by eprentise). It was able to extract data out of the source Oracle system, transform it, and load it to any of the Oracle tables. But as far as I remember, Oracle never recognized it and it went into oblivion after some time. There was another product similar to this and what happened to that, is also not clear - may be that too died without support. The 3rd solution can be through the technical way.....ramp up the technical developer team, create a codified solution in batches, move all the data and architectural setups to a new instance, re-set-up the old instance as per new COA and then move the data back through data conversion. This one seems easy on paper but believe me, it is the most risky and lengthy procedure. One gets a feeling after looking at all solutions that going for a re-implementation is probably the best solution but again, need to look case to case before making a decision.

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The fact is that application upgrades coupled with COA changes is a pain these days and is not something that organizations can avoid as they get lot of opportunities to stream line their operations and financial reporting after doing this.