How strategic decisions drive ERP operational efficiency and cost optimization
What You’ve Been Told about ERP Upgrades — and What’s Missing from the Story
For decades, ERP vendors have shaped the narrative around upgrades, promoting the idea that staying on the latest release is synonymous with innovation, security and progress. IT leaders have found that the reality is quite the opposite – constant upgrade cycles offer marginal value, often introduce significant disruption to day-to-day operations, raise costs and risk – all while failing to deliver on any measurable ROI.
Gartner estimates that more than 70% of ERP initiatives will fail to deliver the expected benefits and 25% will fail catastrophically – striking evidence of a system that is stunted. In many cases, companies upgrade not because it’s the right move — but because they feel pressured to keep up.
Strategic leaders increasingly recognize that saying ‘no’ to unnecessary upgrades, and ‘yes’ to optimizing their core systems can strengthen business outcomes. By examining the full spectrum of hidden upgrade costs, direct and indirect, enterprises often find that the smarter path starts by first pausing to evaluate their innovation path with intention.
Let’s begin by exploring the other side of the ERP upgrade conversation — the one rarely told by vendors.
We’ll unpack:
- The hidden costs of upgrades — direct, indirect and opportunity costs
- When saying ‘no’ actually leads to better business outcomes
- Real-world case studies of organizations that got it right (and wrong)
- A decision-making framework to evaluate upgrades through an ROI lens
Organizations that take the time to assess the true costs, risks and outcomes of locking into constant upgrade cycles discover that a composable approach is often the most strategic alternative for future-readiness. With measured proof of hollow ROI, IT leaders are turning to options that have proven success of cost-savings, while optimizing core systems to deliver value from their investments.
The Hidden Costs of ERP Upgrades
Vendors push upgrades as critical milestones in a company’s transformation roadmap, selling new features, promised integrations and improved security. The assumption is that all upgrades drive ROI, but in practice, it can lead to inflated risk without the reward.
What’s often missing from the upgrade conversation are the costs that don’t appear on the initial proposal —the hidden costs that emerge only after the project is underway.
These costs fall into three broad categories:
- Direct costs
- Indirect costs
- Opportunity costs
Direct costs are the most visible but still frequently underestimated. Implementation and consulting fees can quickly escalate, especially when specialized expertise is needed. Full regression testing is essential — not just for the ERP itself, but for all connected systems, workflows and custom integrations. Additionally, if the upgrade includes a shift to a SaaS model, many organizations see a substantial increase in run-rate costs, replacing their previous one-time license fee with ongoing subscription expenses.
Indirect costs are harder to quantify but just as impactful. Upgrades often introduce significant disruption to daily operations through planned (and unplanned) downtime. Teams must be retrained on new interfaces, features and processes — time that could otherwise be spent driving the business forward. Customizations built over years often must be reworked, requiring renewed justification, effort and in some cases, reengineering of core processes that were already working well.
Then there are the opportunity costs — arguably the most overlooked of all. Resources, both financial and human, are finite. When a company commits to a large-scale upgrade, it often diverts attention away from strategic initiatives that could yield higher ROI. Then, because critical human resources may be tied up for months, or more likely years, the organization risks falling behind simply because its best people are focused on upgrades instead of transformative initiatives. As a result, innovation gets delayed, agility slows and leadership focus shifts toward managing complexity instead of driving growth.
When all these costs are considered holistically, it becomes clear that the decision to upgrade should never be automatic. It should be measured, justified and aligned with broader business priorities, not driven by vendor timelines.
The Risks of Getting Locked-In to Upgrade Cycles
When saying ‘no’ to an ERP upgrade, you’re not stalling progress, you’re often making the most strategic, ROI-positive decision available today. For many organizations, the upgrade treadmill creates more disruption than value. In fact, recent real-world examples show that deferring upgrades leads to meaningful operational gains, budget relief and space for future innovation.
Consider these real-world situations:
- Stable Processes: Your ERP supports your current operations well. Rather than introducing risk to a system running smoothly, a major retailer deferred an upgrade and shifted to third-party ERP support, a move that freed up budget capacity without compromising performance. With an investment of several hundred thousand dollars dedicated to redeployment of internal IT talent to improve customer facing omni capability, the retailer was able to drive top and bottom line growth.
- Marginal Value: New features don’t always translate into meaningful business outcomes. Many enterprises discover that the promised improvements have minimal impact compared to the cost and complexity of adopting them. Companies should assess the financial benefit of these new features and compare that to the cost to implement those features.
- Customization Overhead: Reworking existing efficiencies adds more cost than benefit. One global grocery chain learned this the hard way: driven by upgrade pressure, they embarked on a full ERP overhaul that ballooned to over $600 million, ultimately being scrapped due to misalignment, over-customization and operational disruption.
- Vendor Lock-in: Especially in SaaS models, upgrades can increase dependency while reducing control for future scenarios. Holding firm gives companies more agility in the coming days of Agentic AI ERP. Bundling Infrastructure and Software into one subscription sounds convenient, but at what cost? ERP is on the verge of a major transformation, driven by Agentic AI and automation. Committing to a full upgrade now can lock you into a model that may soon feel outdated. A smarter approach is to optimize and extend your current systems with AI capabilities — gaining immediate benefits while staying flexible for the next wave of innovation.
A Smarter Framework for ERP Upgrade Decisions
Your systems have been working well and will continue to work well for another decade. They just need to be optimized, effectively extending the life of your investment and keeping you in control of your roadmap destiny.
Steps to optimize current value: What’s the business impact? Does it justify the cost and risk?
- Assess Timing: Align upgrades with broader transformation goals and capability needs. You will likely find that the road to faster, better innovation is through a composable ERP model rather than an overhaul.
- Engage Stakeholders: Finance, operations and IT— all must have a voice. Especially as software and related expenses, as well as the direct, indirect and opportunity costs, impact the top and bottom line, working closely with key decision-makers and lines of business across the organization is an imperative for successful outcomes.
- Quantify ROI: Build a real, defensible business case with data — not assumptions. Consider all outcomes of potential decisions, including one most do not consider, preservation of optionality.
What vendors don’t want you to know is that once your business operations are supported and optimized – AI and Agentic AI can be layered onto existing software, and that constant upgrade cycles provide little to no measurable ROI in so many cases. The alternative method to success is to utilize third-party support providers that can support existing systems for at least 15 years, optimize current infrastructures and innovate with Agentic AI to build future-ready strategies that give you back control of your own data systems.
Final Thought: Saying ‘No’ to Vendor Upgrades is a Future-Proofed Strategy
Saying ‘no’ to constant ERP upgrades isn’t about being risk-averse — it’s about being ROI-driven. It’s a decision rooted in agility, control and commitment to finding value in decades worth of investments.
Rather than defaulting to upgrades, organizations often deliver greater ERP operational and cost efficiency by optimizing their existing business processes, technology, security and operations. By focusing on extracting more value from the investments they’ve already made, companies can accelerate growth and profitability without the disruption and cost of major upgrades.
Start now:
- Audit your current ERP performance: Is it meeting your business needs today?
- Lay out your true strategic priorities: and assess whether an upgrade supports them.
- Evaluate the real business value of available upgrades, not just technical features.
- Engage stakeholders across finance, operations, and IT to build alignment.
- Build a defensible ROI-driven roadmap, one that puts business outcomes first.
- Connect with Rimini Street: as the global leader of third-party support for Oracle, SAP, VMware and hundreds of other products, we’ve successfully helped thousands of clients take back control of their IT roadmap, save over $10B USD in total support costs to be reinvested in growth initiatives, and free up significant people, time and money through unmatched, premium support. Get a conversation started at your earliest, for immediate support.
Too often, ERP upgrade decisions are made under pressure — triggered by a looming support deadline, unexpected issues or vendor-imposed deadlines. By then, it’s often too late for a thoughtful, strategic evaluation and in some cases, hundreds of millions of dollars can be lost.
But the smartest companies don’t wait for the pressure to mount. They take control early.
