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Do you need an ERP Pre-Nup?
Published on by CS3 Technology in Blog Posts


By: Shawn Slavin

If you live in Hollywood or have a net worth up there with the Gates’ and Buffets, you wouldn't consider getting into marital relationship without a prenuptial agreement. Why? Because every relationship has to end. Even marriage vows define the standard agreement: ‘till death do you part.’ It only makes sense to put in writing what happens when a relationship with monetary consequences comes to an end. This translates especially well when discussing ERP systems. Particularly those involving a subscription arrangement.

CS3 was recently contracted by a company whose current uses a SaaS-based ERP system. The company has decided to move away from the SaaS provider to another ERP system. The company requested a contract extension for three months to make their system transition easier. Answer: “Thank you, no. We only provide annual contracts.” They also asked what the cost would be to continue the contract for a year with only a single user. Answer: “Why yes, we can do that. That will be $65,000.” Ouch.

In “The Olden Days” of on-premises software deployments, when a company changed ERP systems, they would leave a copy of their old system up and running so they could go back to it to research historical information. Since they had purchased a perpetual license to use the software, they were free to continue running their existing version as long as they liked. Barring any operating system or hardware conflicts, this could be quite some time.

When operating in a SaaS environment or if you purchased access to your EPR package on a subscription basis, when your contract runs out, you no longer have access to your system. In a Saas or hosted environment, this could even include access to your historical data.

Contracts with most SaaS providers have provisions to provide the customer with copies of their data at the end of a contract. This typically comes with an additional cost. Most often, this data in the form of text files. Many, many text files. It is then the customer’s responsibility to build a tool to pull this data together so it is once again meaningful to them.

As with the dissolution of any relationship, things may get contentious and no one is going to leave with everything they want. Hopefully, if you can create a separation agreement while the luster is still in bright and everyone is feeling wonderful, life on the other end of the tunnel will be a little smoother. This might not help even reduce the amount of ice cream needed to get over things however!

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