It is a sad fact of life that systems tend to degrade over time. Performance and reliability are inversely related to age. I only have to ponder my physical condition to appreciate this observation. 

This principle also applies to commercially available business systems. It is one reason why companies subscribe to software maintenance agreements. As long as you pay your annual fee, you are eligible to receive and install new releases as well as utilize help desk services.

Many operations running top-tier warehouse management systems and other supply chain execution products grapple with a software maintenance conundrum. They typically pay an annual maintenance fee ranging between 18-22% of original license fees. This gives them access to vendor support services. Also, it generally gives them the right to install new version releases for the covered product. 

However, installing these upgrades can be an expensive proposition, especially if your solution has been highly customized. 

For some folks the cost of an upgrade may represent a substantial portion of their original investment. So an upgrade can be an extremely tough proposition to sell to top management, especially if your system is running just fine as is. 

Even if you properly accounted for it in your original total cost of ownership (TCO) calculations, when it comes time to commit the investment for an upgrade, you inevitably face the question, why fix it if it isn’t broke? 

Unfortunately software vendors can force your hand by imposing an end-of-life deadline on support contracts for a particular version. Cross that deadline and these services are available only on a time and materials basis.

Depending on the package and situation, this prospect may be acceptable to some organizations. They can continue to get reliable support from the vendor, third parties, or internal resources well beyond the date that the vendor ceases offering support under an annual contract for the particular version. 

But many others can’t risk this approach. Their complex solutions run under complex technology stacks with databases, operating systems, application servers, integration middleware, and other third-party software that all must be periodically upgraded to remain on support. They know that the quality of support will only continue to decrease once this deadline is crossed.  

As a software package continues to evolve in functionality and technical architecture, it gets harder to find support resources that can effectively deal with issues for outdated versions. Things can change that much. 

Also, the likelihood of failure can also increase with older releases, especially when the application sits upon a complex stack of hardware and other software that you may not be able to update due to compatibility issues. This can put the business at risk, as it may take an unacceptable amount of time to get a mission critical application up and running again.

Staying within supportable life span isn’t the only reason why distribution operations choose to install an upgrade. New functionality, as well as technology platform and facility changes can factor into the decision making process. 

But many operations wrestle with the decision primarily from a supportability perspective. In this situation, making the decision to pull the trigger on a costly upgrade can produce major organization angst. You can only know for sure that you waited too long when your application goes into cardiac arrest.

 

These observations aren’t news to most supply chain operations that face this upgrade paradox. They know that sooner or later they must bite the bullet and upgrade or replace key applications. 

Given the general state of the economy over the past couple of years, it has been exceptionally tough to launch any upgrade project that involves a major expenditure. But the longer you wait, the more it can cost. And for some folks the cost of upgrading can easily approach the replacement price.

No wonder SaaS solutions can be so intriguing. Let someone else worry about keeping the application and its technology stack up to date. 

Unfortunately, SaaS solutions probably aren’t viable solutions for many top-tier applications where customization is still the norm. After all, customization is a key reason why upgrades can be such a headache. User extensibility and rule-based engines all offer the promise of zero modifications. But this promise is still in the future for many operations and applications. In the meantime, many operations must still grapple with the upgrade conundrum.

--Tom