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Gordon B. Hinckley once said, “You can’t build a great building on a weak foundation.” Similarly, in the context of ERP systems, the “foundation” represents the financial stability of your ERP publisher, while the “building” symbolizes your company’s business continuity. This idea is straightforward, yet many businesses opt for potentially financially unstable ERP publishers without fully grasping their implications. In this article, you will learn why the financial stability of your ERP publisher is crucial and what could happen if you choose one that isn’t financially sound.

We have listed down the categories of publishers that would fall under these categories:

• A small publisher without inadequate market share to support ongoing development and maintenance costs.
• A well-known publisher that is operating at a loss in order to gain market share.
• A product that is not profitable but backed by a large, financially sound corporation.

When you implement an ERP system, you are relying on an algorithm that is developed and continuously maintained by the ERP publisher, even if you own the code in the case of an on-prem installation. The costs of this ongoing maintenance are typically shared by their customers. If the publisher lacks sufficient market share and existing customers are unwilling to pay more, the publisher may face financial difficulties. This could lead to the following consequences for you.

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1. ERP products no longer supported

Much like cars or heavy machinery, ERP products are complex systems that should only be fixed by their publishers to avoid unintended consequences. If you’ve chosen a publisher that can no longer provide official support due to financial difficulties, your options are limited to seeking help from unauthorized consultants, which could lead to unpredictable behavior of your ERP system, or starting the implementation process all over again. To avoid this scenario, it’s best to steer clear of the financially unstable ERP publishers mentioned earlier.

How often do ERP publishers face cash challenges? ERP development is expensive and can drain cash flow. The frequency of these challenges largely depends on their cash reserves. As a general guideline, we recommend that ERP publishers with thousands of installations in the SME market to maintain financial stability. For markets with larger customers, this number may be lower.

2. Unable to provide regulatory upgrades

ERP publishers need to develop new features or update existing functionality to ensure compliance with changing regulations. If the publisher lacks the financial resources to support this development, you may find yourself out of compliance, potentially facing monetary penalties. When the Everest ERP system experienced financial troubles, its customers had to find a new solution to maintain regulatory compliance. You can avoid this situation by choosing financially stable ERP publishers.

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This resource provides a framework for quantifying the ERP selection process and how to make heterogeneous solutions comparable.

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3. Incompatible with underlying software or hardware

ERP products rely on various software packages and hardware components. For instance, Acumatica ERP is built on the .Net platform, which is owned and maintained by Microsoft. Each version of .Net is compatible with a specific version of Windows software, and Windows software may only work with certain Intel processors. Whenever an underlying component is updated, any dependent component must also be updated to maintain compatibility.

If an ERP publisher is not financially stable enough to support ongoing compatibility fixes with hardware and software, you may have to undergo the implementation process again with a different ERP publisher. Alternatively, the software could stop working suddenly due to compatibility issues, leading to disruptions in your business operations.

4. Chances of getting acquired

If an ERP publisher faces financial difficulties, they may need to secure an investor to fund development and maintenance. This investor could be a larger ERP publisher, such as Infor or Oracle.

When larger companies acquire smaller ERP publishers, they often use various strategies: 1) raise prices to recover ongoing losses, 2) discontinue the product and push you to switch to one of their own, 3) reduce support and other benefits you previously received, or 4) impose limits on storage or bandwidth, requiring you to upgrade. In any of these scenarios, you’ll either face higher costs or undergo another ERP implementation.

5. Inability to find consultants to get support on the product

Consultants prefer working with products backed by financially stable companies, as it minimizes risks to their careers. If an ERP publisher is facing financial challenges, you may find it difficult to secure consultants who can support the product.

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6. Each of these risks has the following financial implications for your company.

1. Pay more than the agreed amount originally.
2. Lose investments on the original upgrade and might need to plan for a premature switch.
3. Forced to switch to an unwanted and expensive product in case of an acquisition.
4. Forced out of the platform if the product gets shut down by the acquiring company

Conclusion

ERP publishers provide the foundation for your business operations. Opting for a weak foundation, such as a financially weaker publisher, is not a wise decision. While you might save a small amount of money with these publishers, the financial risks involved could have serious consequences that aren’t worth the savings.

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The market is flooded with dozens of outdated ERP systems (confusing to the extent that they use vendor names to refer to a product, as keeping up with millions of products is nearly impossible), including Macola, SAP R3/ECC, and Point.Man, as well as older versions of Syteline and Epicor. Legacy ERP products from publishers like Sage, IBM, Oracle, and Microsoft are also prevalent. These outdated systems span across various publishers and product categories. In some cases, the ERP publisher may no longer support these products or versions, or they may have even been advised to discontinue support altogether.

ERP Selection: The Ultimate Guide

This is an in-depth guide with over 80 pages and covers every topic as it pertains to ERP selection in sufficient detail to help you make an informed decision.

Download Now

As the cost of supporting legacy versions rises due to a shrinking install base (having a handful of installations for a product isn’t uncommon in the ERP industry), vendors often employ various strategies to encourage customers to migrate to newer versions. In some cases, these warnings may simply be tactics to nudge you toward the version they prefer. However, not all publishers operate the same way. For some, the decision to phase out support is genuine, as maintaining these products or versions may no longer be financially viable. The install base may have dwindled to a point where the cost of upgrades and maintenance is no longer justified. Failing to understand the product life cycle can have repercussions. Consider the car market—what automotive manufacturer do you know that supports a car or model indefinitely? None, would you not agree?

Now that we agree most products have life cycles—and for good reason—it’s wise to embrace and evaluate the risks of using a product against the producer’s recommendations. Yet, that’s not always how life works, so why do businesses choose to stick with outdated software? There could be several reasons. Perhaps it’s the belief that the old software no longer incurs costs. Or maybe the memory of a difficult and disruptive ERP installation still lingers. Another factor could be the advice of a consultant who discourages upgrading. Finally, it might simply be a lack of understanding of the risks and benefits associated with upgrading.

1. No Official Support

Tip: If you are still lucky to have support from your publisher on the outdated ERP systems that you are using, you may want to skip this section and move to the next.

Some consultants may argue that lack of official support isn’t a concern, but support from the publisher remains critical. Why? An ERP system is essentially a black box, and only the OEMs truly understand its inner workings—or should be the ones addressing serious product issues. While you might find workarounds or apply temporary fixes, the long-term behavior of the system becomes unpredictable. These improvised solutions could have unintended consequences.

To put this into perspective, official support is like a manufacturer’s warranty or the support provided with a car. Sure, you might take your car to a local mechanic for minor repairs, even if they aren’t certified or endorsed by manufacturers like Honda or BMW. However, when a major issue arises—such as engine or transmission failure—the mechanic may not be equipped to handle it, leaving you without reliable support. You can’t afford to take such a gamble with financial software, which functions as the “brain” of your company. Imagine the consequences if your company’s brain were to malfunction.

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Thinking of embarking on a ERP journey and looking for a digital transformation report? Want to learn the best practices of digital transformation? Then, you have come to the right place.

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2. Security Vulnerabilities

Outdated ERP systems leave you vulnerable to security risks because the core software is no longer being updated. Why is this a serious concern for financial software? Financial applications hold sensitive and confidential data about your company and its customers. If this data were to be compromised due to a security vulnerability, the financial and reputational consequences could be significant—risks that no business can afford to overlook.

To illustrate this, consider security updates like annual flu shots. Just as flu shots are a preventive measure to protect you from evolving flu strains, security updates protect your software from emerging threats. Each year, new strains of flu viruses are identified, requiring the vaccine to be updated—and the same principle applies to software. With official support from the OEM, they monitor new strains of computer viruses and security threats, providing regular updates to keep your system protected.

You definitely don’t want to catch the “ERP flu,” especially if you’re not accustomed to handling it. So far, your publisher has shielded you by providing preventive upgrades to keep your system protected.

3. Outdated Capabilities

Explaining or showcasing software capabilities can be challenging because, for many, software feels like a vast black box. Similarly, it’s not always easy to convey why the features you currently rely on might be outdated. A helpful analogy is to think about cars: you’d probably agree that driving a 1992 Nissan would be a vastly different experience compared to driving a 2020 model.

If we asked you to compare these two models, some casual users might point out that the design of the older model isn’t as appealing, or they might assume that the 2020 version is obviously better. On the other hand, those with a bit more technical knowledge might highlight differences in safety ratings, engine power, or transmission quality. Regardless of their level of expertise, however, both groups would likely agree that the 2020 model outperforms the 1992 version, offering enhanced capabilities due to technological advancements and improved design.

ERP System Scorecard Matrix

This resource provides a framework for quantifying the ERP selection process and how to make heterogeneous solutions comparable.

Download Now

4. Expensive Consultants

In the consulting market, consultants are eager to work with the latest and most cutting-edge technologies, as it boosts their resumes. They aim to capitalize on emerging trends by becoming early adopters before the market gets saturated. The same logic applies to older products and technologies. When an OEM shifts its strategy, consultants typically move away from outdated ERP systems to avoid having their resumes become obsolete. Those who remain to support these legacy systems will likely charge significantly higher rates due to the scarcity of qualified experts.

There’s no way to avoid this; it’s simply how the talent market operates, driven by supply and demand. To avoid ending up in a tough spot, the best course of action is to upgrade your product as the market evolves. Otherwise, you could find yourself stuck with a 1992 car and a broken transmission, with only a few expensive experts able to fix it. The difference with ERP systems is that, while replacing a car carries minimal risk, the stakes are much higher with ERP systems. The risks include business disruption and potential financial loss.

5. Costly Upgrades and Maintenance

Older systems demand more time for troubleshooting and extended maintenance since they’re no longer being updated by the OEM. The reason people upgrade their cars isn’t just for prestige—it’s because maintaining an older car becomes more expensive. Maintenance costs can sometimes exceed the cost of purchasing a new one. ERPs are no different.

How many 1992 cars do you see on the road today? And if you don’t drive one yourself, why would you risk using outdated ERP systems? I’m sure you’d agree that sticking with such an old system is far from a smart decision.

6. No Mobile Capabilities

When older technologies were created, mobile devices were not as widespread, so they weren’t built to be compatible with them. In contrast, modern cloud software provides the flexibility to access your system from anywhere, on any device. This means you can have real-time insights right at your fingertips, along with the ability to manage your ERP from a mobile phone.

7. Frequent Outages

A 1992 car is less likely to be reliable and may break down frequently, and the same holds true for your ERP system. Since the software isn’t being updated, it’s prone to malfunctioning, and your consultants may take longer to fix issues because they might not be familiar with what’s causing the problems. This could disrupt your business processes, preventing you from fulfilling orders or generating invoices.

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8. Hardware or OS Incompatibility

Even if your consultants manage to find workarounds for the software, it may not be compatible with newer database versions. This could lead to issues where the software doesn’t function properly with the latest operating systems or hardware.

9. Challenges in complying with regulatory requirements

Modern software typically updates automatically to reflect changes in laws and regulations, such as updates to PCI compliance, data security, new tax laws, and accounting rules. By using outdated software, you not only miss out on these essential updates, but you also risk facing significant fines for non-compliance with these regulations.

10. Customer and Employee Experience

Regardless of whether you’re a small or large business, today’s customers have similar expectations to those of Amazon when it comes to their experience. They value reliability and traceability with their orders, and they prefer to engage with businesses that are predictable and trustworthy. Using risky software, however, introduces unpredictability, undermining your ability to deliver with credibility.

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The same goes for employee experience. Millennials grew up using mobile devices and social media platforms like Facebook. They’d rather work for your competitors than struggle with outdated, clunky software. With talent already being hard to find, you don’t want your software to be the reason you lose top candidates.

Conclusion

Switching from outdated ERP systems requires extensive planning, and to avoid being caught off guard, it’s wise to align your ERP upgrade process with current market trends. Skipping a model or two isn’t the end of the world, but driving a 1992 car is far from a smart choice.

Your first step should be to check if your current software is still supported by the OEM and explore your options if support has been discontinued. Independent ERP Consulting firms like ElevatIQ can assist with data migration and transition planning, helping you avoid potential issues down the road.

QuickBooks is not necessarily an ERP system, although commonly referred to as one, as some people feel that ERP and accounting systems are comparable (and interchangeable). If you are in a group that does NOT regard it as an ERP, then this article may not be for you. However, if you do regard it as an ERP, then read on to learn about two camps inside the QuickBooks ERP group:

1. The first camp considers it the most intuitive, tiny ERP system (terribly simple), perfect for companies who don’t have large budgets and overarching needs.
2. The second camp, on the other hand, regards it as the most terrible ERP system (simply terrible), prone to errors and causing similar issues as spreadsheets, such as duplication of data across systems, lack of control, unavailability of real-time financial data, and overreliance on analysts for reporting.
   

In either case, read on to learn more about why these camps differ in their opinions about QuickBooks.

The 2025 Digital Transformation Report

Thinking of embarking on a ERP journey and looking for a digital transformation report? Want to learn the best practices of digital transformation? Then, you have come to the right place.

Download Now

Terribly Simple ERP camp: QuickBooks is the best ERP ever

To some extent, we agree with their assessment. That QuickBooks Enterprise/Online/QBO /QBE (collectively referred to as “QuickBooks” henceforth) is most certainly one of the easiest ERPs ever built. Why? Because it is designed for users who don’t have experience with any other more sophisticated ERP systems. Moreover, its design is friendly for accountants or business users with preliminary accounting knowledge (or needs). Yet most of the complex tasks are still expected to be performed either manually or through the use of spreadsheets.

When you log in to QuickBooks, everything looks great. You can create invoices or bills without any limitations and perform journal entries as you like. Financial statements that you need for the most common usage are all pre-built. The batch process is super easy, and you just have to watch a couple of YouTube videos to master it. You can connect your bank accounts with one simple click. And all your transactions are right there for you to perform reconciliation or close books. The recurring entries and closing process is super easy as well.

The users of this camp feel that QuickBooks is the best system ever designed. And every single ERP system out there must be inspired by its business model. Now let’s hear from the second camp why they feel that it’s terrible.

Simply terrible ERP camp: QuickBooks is the most terrible ERP system ever

If everything is so easy about QuickBooks, why does the 2nd camp feel that it’s terrible? Well, to understand their perspective, let’s first analyze the demographics of these groups.

Recapping the point mentioned above for the 1st camp, the user base of that camp didn’t have experience using a “real” ERP system.

The 2nd camp, however, consists of users who have used at least one ERP system in the past or have significant experience solving complex business or accounting problems–using a system. They have seen the fully automated, end-to-end integration of the processes first-hand. And they understand that their lives weren’t as difficult when they had access to such a system. They didn’t have as much chaos and didn’t have to manage as many spreadsheets. They also didn’t have to create as many ad-hoc processes even though the other company was much larger in terms of operations.

While the 2nd camp agrees with the 1st camp about the overall ease of use of QuickBooks, they feel that QuickBooks’ design has limitations as per their experience.

An Example of a Hypothetical Business

To understand this better, let’s take an example of a hypothetical business. When a business is small, say under $5 mil, their teams are small, too. Their employee strength could be 5-6 people, with each employee independently responsible for their functions. One is for sales, the other is for purchasing, and the third is for accounting. They can manage their functions as they want without overstepping.

Continuing to the same example. Once a company grows past $5 mil, the order volume will most likely go up. More people will need to manage each function. The functions such as operations or finance would grow in proportion as well. With more people added to each group, they will bring unique perspectives to each problem, different ways of documenting processes, and different ways of performing the same tasks. With the functions being independent, they would have their budgets and freedom to buy the software/tools that make them efficient. The added growth would lead to additional processes, such as geographic or product expansion.

While QuickBooks could be great to assist with accounting for this company, the other processes would remain largely manual or disconnected if managed in different software (such as an inventory or WMS add-on for QuickBooks, or an add-on to integrate Zoho or Salesforce CRM with QuickBooks, FreshBooks, Xero, or Sage). For instance, inventory is not connected to the accounting system, or the warehouses are completely isolated or running based on an “honor system.” Or the sales system living a life of its own or running manually. Likely, there will not be end-to-end visibility or limited control over the processes.

ERP System Scorecard Matrix

This resource provides a framework for quantifying the ERP selection process and how to make heterogeneous solutions comparable.

Download Now

Another Example of This Camp

Let’s take a hypothetical example of a business problem at this stage if their salespeople or customers ask them to sign a large contract where they expect them to deliver within 10 days. Without the data available for previous successes (or failures), it’s very hard to commit to the delivery date (and execute with confidence). If they need the necessary data to back up their decisions (and whether they have enough capacity to commit to such demand), their data will be duplicated across multiple systems. They might also need the help of an analyst who can quickly crunch a report.

As you can imagine, it would be a nightmare to be in this position, and this is why they feel that QuickBooks is simply a terrible ERP system, as It is not designed to be an ERP system.

Now, you must be wondering which perspective you should focus on. In other words, which camp should one join?

ERP Selection: The Ultimate Guide

This is an in-depth guide with over 80 pages and covers every topic as it pertains to ERP selection in sufficient detail to help you make an informed decision.

Download Now

Here are our take and recommendation

We recommend identifying your tribe. Are you a company that is under $5 million in revenue (with limited experience implementing a real ERP)? In this case, we recommend managing with QuickBooks and with isolated systems (such as an inventory add-on for QuickBooks, a WMS add-on for QuickBooks, or an add-on to integrate Zoho CRM with QuickBooks). Or the combination of manual processes augmented with the use of spreadsheets.

On the other hand, once you grow past $5 million, then it might be time to migrate to fully integrated processes and consolidated data siloes. This new state would require embracing the new dynamic as their design removes data siloes, operating on one data model, to reduce operational reconciliation overhead. This would be a mindset shift as it might feel like increasing some work because of the boilerplate with such data and process model. But it will help with the overarching operational efficiency, allowing you to scale.

It’s just unfair to compare QuickBooks with an ERP system (or call it an ERP system).

What if I want a system that is as easy as QuickBooks but has all the bells and whistles of a sophisticated ERP system

Well, for all practical purposes, we have some bad news for you: such a system doesn’t exist. While there are systems that would be closer to providing a similar user experience, replicating the same user experience is nearly impossible.

Think of it this way: Honda Civic Coupe might smoothly swerve around turns, but replicating this experience would be nearly impossible when your family is ready for an SUV. Upgrading to an SUV (or an ERP) requires a mindset shift and getting used to the new ways of working. Comparing SUVs and Honda Civics is unfair as they are designed for different purposes, just like ERP systems and QuickBooks.