ERP users bristle at upgrade pressure, maintenance costs

Computerworld - Many IT managers are becoming increasingly agitated by the ballooning costs of maintaining packaged business applications and the relentless efforts of software vendors to push them to upgrade their systems.
Five users of ERP software and other business applications said this week that they are being hit by increases in maintenance fees or feeling pressure from vendors to invest in upgrades. Their comments back up survey results released by consulting firm AMR Research Inc., which said in its report that IT managers are becoming "furious" about maintenance costs and upgrade policies.
A sizable number of the 202 survey respondents are starting to act on their anger, according to AMR analyst Jim Shepherd. For example, one-third said they plan to ask vendors to renegotiate their software maintenance contracts. And more than 20% indicated that they're weighing the idea of switching vendors.
Quaker Chemical Corp. in Conshohocken, Pa., is among the dissatisfied users. "For the last three years, we've seen [maintenance and upgrade] price increases and have received no added benefits for this added cost," said CIO Irving Tyler.
Quaker uses applications developed by J.D. Edwards & Co., which was bought last year by PeopleSoft Inc. Tyler said Quaker plans to cut costs by stabilizing its ERP system and relying more on internal staffers to support it -- a move that's being aided by the soft economy, which has made it easier to hire high-quality IT workers. Quaker officials are also considering a plan to hold off on installing future software releases unless business needs "change dramatically," he said.
Tyler declined to point a finger at PeopleSoft or any other vendor, nor would he disclose specific details about the software costs the chemical maker is being asked to bear. But, he said, "if the vendor wants more fees for the same service and the same software, then that is not a good deal."
Richard Scheerer, vice president of IT at The Clarks Companies, North America, in Newton Upper Falls, Mass., said some software vendors have tried to force the shoemaker into expensive upgrades without considering either the costs or potential benefits of the projects.
Clarks uses applications like i2 Technologies Inc.'s supply chain management software. But Scheerer also declined to single out any vendors, saying the problem "exists across the board." He added that Clarks is "a smaller shop with several large packages," which limits its ability to handle maintenance and support internally.
Application vendors have been increasing maintenance costs and pushing existing users to do more upgrades to compensate for drop-offs