IT and business leaders agree that enterprise resource planning (ERP) systems are viewed as a necessary evil. On one hand, ERP is a mission-critical tool that supports operations; on the other, it’s a hefty investment that feels more burdensome than beneficial. Factoring in vendor lock-in or costly rip-and-replace mandates, it comes as no surprise that organizations are feeling the weight of both the cost and impact of these tools on their top and bottom lines.
ERP optimization is a proven method, promoted by Gartner® and top executives, that can drive efficiency and agility in your operations. It’s simply a matter of changing your perspective and leveraging optimization strategies — such as third-party software support — that yield tangible business outcomes and prime systems to become a springboard for innovation.
The Impact of ERP optimization on operations and outcomes
ERP system optimization works to make your software run smoother and tackle the obstacles that prevent your business from moving forward. Well-optimized enterprise software can:
- Streamline processes
- Enhance data accuracy
- Improve decision-making capabilities across the organization
When ERP systems are functioning at peak performance, they can generate significant cost savings, increased productivity and improved customer satisfaction. Conversely, neglecting optimization can result in operational inefficiencies, wasted resources and, ultimately, a negative impact on the bottom line.
Moreover, as businesses evolve, their enterprise software needs change. The ability to adapt quickly to new market demands, regulatory requirements and technological advancements is crucial. According to Gartner, the managing of existing applications as assets is a better alternative to rip-and-replace efforts.1 Organizations that prioritize ERP optimization through continuous modernization are better positioned to respond to changes — fast — ensuring they remain competitive in a rapidly evolving and increasingly aggressive business landscape.
3 Actionable ideas for ERP system optimization
1. Optimizing operations by consolidating services under a single vendor
Managing multiple vendors for enterprise software operations — including support, maintenance and ongoing management — can lead to inefficiencies, increased costs and fragmented service. By consolidating application services under a single, independent third-party partner, organizations can streamline their operations and reduce reliance on multiple service providers. A qualified third-party partner can deliver comprehensive support and managed services across the enterprise software landscape, ensuring all aspects of the system are well-coordinated and proactively managed. This approach not only simplifies communication but also:
- Reduces self-support and case escalations
- Addresses skills shortages
- Enhances accountability
- Maintains business continuity
- Leads to faster issue resolution and improved system performance
A survey of U.S. CIOs and CTOs revealed that 72% of IT leaders are already seeking out new support and services models with a more integrated approach.
2. Optimizing infrastructure by embracing a hybrid cloud strategy
Transitioning to a modular, hybrid model for your enterprise IT environment can significantly enhance flexibility and scalability without unnecessary disruption, lock-in or inflated costs. Adopting a mixed cloud/non-cloud infrastructure is crucial for ERP system optimization because it enables organizations to adapt to changing business and technology needs without being constrained by the limitations of a single software vendor or a rigid reimplementation process. Unlike traditional reimplementation, which can be costly and time-consuming, a hybrid approach allows companies to incrementally modernize their ERP systems, integrate new technologies and scale resources on demand.
This flexibility helps to:
- Promote innovation
- Reduce the risk of vendor lock-in
- Empower businesses to leverage best-fit solutions from multiple providers
As a result, organizations can respond more swiftly to market dynamics, support growth objectives and maintain a competitive edge while maximizing the return on existing enterprise software investments. This agility is particularly valuable in industries where market conditions can shift rapidly, allowing businesses to pivot quickly and capitalize on new opportunities. That’s why it’s unsurprising that 73% of enterprises follow a hybrid cloud strategy.
3. Optimizing budget by reducing overhead costs to self-fund innovation
A common misconception about enterprise software is that high ongoing support and maintenance costs are inevitable. These business-critical systems don’t have to be a sunk cost required to “keep the lights on.” However, many organizations — convinced by vendor promises of AI and other innovative features in the future — are overspending on support contracts and receiving very low ROI. By strategically reviewing and rationalizing ERP support spending, significant budget can be freed up for business innovation.
One of the most effective ways to optimize your ERP environment and quickly reclaim budget for value-driving innovation is to adopt third-party software support. Third-party providers can deliver comprehensive maintenance and support services, often at a fraction of the cost charged by original software vendors. By transitioning ERP maintenance to a trusted independent provider such as Rimini Street, organizations can immediately reduce annual maintenance costs by up to 50%, all while maintaining or even improving service levels.
With these savings, organizations can reallocate precious IT budget to strategic initiatives that drive digital transformation and business innovation — including automating business and IT processes through proven AI platforms that deliver intelligent workflows, real-time insights and ultra-fast ROI in just weeks.
By proactively shifting from a maintenance mind-set to a value-creation mindset, enterprise software leaders can transform their systems from cost centers into sources of strategic investment, turning optimization efforts into a launchpad for sustained innovation.
Real-world implications: Common ERP scenarios
Optimization strategy: Single vendor for support and managed services
A mid-sized manufacturing company uses SAP for its ERP, Oracle for certain financial modules and several local vendors for “help desk” support, patching and enhancements.
Pre-optimization
Fragmented support and communication delays
Imagine a payroll issue. One vendor blames the other, tickets bounce between them and resolution stretches from hours to days (or even weeks), delaying payroll and eroding employee trust.
Business impact:
- Employee morale suffers.
- Finance staff spend extra time managing tickets instead of performing value-add work.
- The organization may face noncompliance consequences if payments are late.
Skills shortages/knowledge silos
If a key ERP resource retires without having trained a replacement, specialized knowledge about customizations or integrations may be lost.
Business impact:
- Lack of proper enterprise software management can lead to extended downtime during critical periods, such as year-end close, resulting in missed deadlines.
- Reporting errors can occur with greater frequency.
- Critical customizations go unmanaged, affecting competitive advantage.
Post-optimization
Enhanced operational continuity and system performance
With a single, accountable vendor providing support and managed services, the organization can avoid issues that typically occur due to reliance on multiple vendors — and improve business outcomes.
Business impact:
- Tickets are triaged more accurately and resolved faster.
- Restoration after outages is significantly improved.
- Tighter SLAs result in decreased downtime and lost revenue.
Real-world example: A global retailer switches to a single managed support partner and sees average ticket resolution time drop by 35%, with fewer lost sales from POS outages.
Optimization strategy: Hybrid/flexible cloud adoption
A healthcare provider wants to add telemedicine features and must comply with evolving HIPAA requirements. But to do so, the software vendor requires that the company upgrade or update its system to meet those requirements.
Pre-optimization
Expensive, unnecessary upgrade
Undertaking an ERP upgrade without a clear business case beyond HIPAA compliance can drain resources and bring strategic initiatives to a halt.
Business impact:
- People, time and money are diverted from high-priority projects to ERP reimplementation.
- Replatforming can result in a loss of critical customizations that the company — and its patients — depend on.
Long-term vendor lock-in
Following the software vendor’s upgrade mandate can affect the company’s IT roadmap in the long run, taking choice out of the equation.
Business impact:
- New features and technologies are restricted to those provided by the software vendor.
- The company is forced to adjust project timelines — or drop them altogether.
Post-optimization
Incremental modernization
Rather than replatforming everything at once (risking excessive downtime and cost overruns), the provider can:
- Move patient scheduling, communications or analytics to a private cloud module first
- Add proactive security or compliance features as regulations change
- Add proactive interoperability features to ensure ecosystem changes don’t affect the ERP system
Business impact:
- The company can keep core systems stable and compliant.
- IT can roll out innovation in weeks, not months.
Increased optionality
With a hybrid model as part of its ERP optimization process, the healthcare organization can select best-fit analytics from Vendor A, secure storage from Vendor B and still retain the business processes and purpose-built customizations in its ERP system.
Business impact:
- The company isn’t forced into costly, all-or-nothing upgrades.
- IT can negotiate better terms/switch providers as needed.
Agility during market shifts
When uncertainty hits, the healthcare provider quickly ramps up telehealth capacity on the cloud, enabling service continuity and even revenue growth while competitors struggle to adapt.
Business impact:
- The flexible ERP infrastructure cushions against unforeseen, potentially disruptive events and regulatory changes, keeping the business running and patients cared for.
Real-world example: By adopting a modular ERP cloud approach, an insurance firm launches a new customer self-service app in less than six weeks — all while its biggest competitor is still dealing with code freezes and lengthy upgrade cycles.
Key takeaways
ERP optimization isn’t just a technical win — it’s a critical component of a successful business strategy that translates directly to better outcomes: faster time to market, improved compliance, lower operational risk and higher customer satisfaction. By optimizing operations through a single vendor for IT services and optimizing infrastructure and budget for innovation, organizations can unlock the full potential of their enterprise software, driving efficiencies that pay for themselves.
Learn how ERP optimization services from Rimini Street can help you get the most out of your business-critical systems to drive your business forward.
