> ## Content Index > Fetch the complete content index at: https://abcsoferp.com/llms.txt > Use this file to discover other available public pages before exploring further. # Should You Downgrade From Tier 1 to Tier 2 ERP? - URL: https://abcsoferp.com/episodes/s04e18-should-you-downgrade-from-tier-1-to-tier-2-erp/ - Published: 2026-08-25T07:00:00.000Z - Updated: 2026-09-19T21:50:13.000Z - Description: Eighty-odd episodes of this show and every one of them has pointed the same way: up. Outgrow the spreadsheets, upgrade, migrate to the cloud, choose your first ERP. This week Pete, Nirav and Emily go the other way and ask the question nobody puts on a slide — should you… - Author: ABCs of ERP & Beyond - Tags: Selecting an ERP, Implementation and go-live, Data, reporting and AI, #episode S04E18 · 48 min ## Episode notes [Send us a message about this episode!](https://www.buzzsprout.com/2109197/fan%5Fmail/new?ref=abcsoferp.com) Eighty-odd episodes of this show and every one of them has pointed the same way: up. Outgrow the spreadsheets, upgrade, migrate to the cloud, choose your first ERP. This week Pete, Nirav and Emily go the other way and ask the question nobody puts on a slide — should you downgrade? **In this episode:** - What tier 1, upper tier 2 and lower tier 2 actually mean, straight from Panorama's 2026 report - The five-user F&O implementation, and how overselling happens - Why third-party ISVs have quietly closed the gap between the tiers - Whether you can feed your ERP — and what happens to master data when you can't - The utilisation audit: print the feature list, mark every line, count what you never use - Why a downgrade is still a full migration, whatever the licence cost says **Hosts:** Peter Nicholson · Nirav Shah · Emily Browning No sponsors, no adverts. Still nothing from Starlink. And we're not saying the accounting one out loud any more in case the AI starts advertising it at us. [Support the show](https://www.buzzsprout.com/2109197/support?ref=abcsoferp.com) ## Watch the episode ## Transcript The speaker labels and timings come from the edited Riverside transcript. Read the full transcript Peter Nicholson (00:00) And welcome back to the ABCs of ERP and beyond the show that looks at ERP from three different seats. Most ERP advice tends to come from one chair and it's normally the partner who sold it or sometimes the end user that stuck with it. Well, we try and triangulate that. We have Nirav Shah, he gives us the partner view. He's at AdCirrusERP and well implements this for a living. I come from the nerdy data and systems side inside a business that runs the ERP day to day. And we have Emily Browning who keeps us honest on business process and project management, the people, the workflows and the systems that are actually meant to serve those people. Now, we are 80 odd episodes into the ABCs of ERP and beyond and almost every single one has pointed in the same direction and that's upwards. outgrow those spreadsheets, upgrade your systems, migrate to the cloud, choose your first ERP. Well, today we are looking the other way and asking the question that doesn't often get asked, and that's should you downgrade? Tier 1 ERP costs you the same, whether you use all of it or even a third of it, but the value only turns up if you go deep and if your master data is in decent shape. Are you leveraging your tier one? do you actually need to step down onto a tier two ERP? So today we are gonna be discussing that, some of the signs that maybe that's the right move for you. So as ever, let's get straight into it. Welcome both. Emily Browning (01:27) Hello. Nirav Shah (01:27) Thank you, thank you. Peter Nicholson (01:28) This is an interesting subject. We've always said about moving from your piles of Excel and piles of physical paper and getting rid of QuickBooks and look at ERP, look at this cool upgrade to your business. Now we're looking at it the other way around because I'm sure there will be people, that are on this kind of legacy tier one ERP, this massive gargantuan thing that's costing them a lot of money, both in licensing every year, but also massive support costs each year to continue to operate on such a huge system that actually they don't need. We say this lots of times, we always say, you don't do this that often, these kind of ERP projects. 15 years worth of ERP improvements is great. Move on to an ERP, but it's just as much the other way around, isn't it? It's 15 years of being stuck on this huge one. Look at what these smaller ERP can actually now do for you. Look the other way if you're already on an ERP system. What do we think about that for an episode today? Emily Browning (02:28) Well, I recall Narav first suggesting this a few weeks, few months ago now. And I remember thinking, mm, yeah, it is quite good, but I've never encountered it. I don't know how common it is. but since then, trade shows, industry knowledge and networking, I've learned that this is actually quite a a big topic at the moment. It's coming up for lots of lots of customers, lots of implementation partners. So I think this is Really valuable topic to discuss. Nirav Shah (02:51) Yeah, I mean just to add to that, it's a kind of growing epidemic, if you will, in the ERP space where these tier one solutions have sold their product and you know, at that time was probably the best choice, right? you know, when you when you look at functionality requirements such as multi-language, you know, being able to see across companies and inventory, multiple taxation methodologies in a single instance, like those were real problems, probably, you know, twenty years ago, fifteen years ago. But, you know, as technology advances, as software advances and we're able to pack more power in smaller solutions, I think, you know, companies are now scratching their heads saying, Hey, you know, we are spending you know, a hundred thousand dollars a month on this this software and maybe they they they're they're paying a maintenance, you know, remember the old way of you buy the software, which was a minimum of one twenty five or two hundred and fifty thousand dollars, and then you pay a twenty percent enhancement, which is, you know, let's say twenty-five forty. And and when you're looking at SAP, you're looking at these bigger tier one solutions back back in the day, that enhancements probably over well over a hundred thousand dollars per year that they're paying. And, you know, you kind of have to sit back and look at, you know, all this marketing out there for software and these tier two solutions and what they're able to do, how much more flexible they are, you know, in its functionality. And, you know, companies are starting to realize what we have now was the Ferrari, right? Back in the day and 20 years ago. But now, you know, some of the features in that Ferrari probably don't exist. I need actually power windows. I don't need manual windows anymore. so you know, it's still a Ferrari, still could do your main functionality, right? The power is still there from a horsepower perspective, but there's certain features and functionality that just you're like, well, you know, I need to upgrade this part of my business now because it just runs more efficiently. and I know there's other systems that do it. So it's it's a it's a growing problem. A lot of companies are looking at this as how do how do we get into a tool that everybody will enjoy using, that's AI driven, that has, power in certain areas where their current software doesn't have power in. So they're all questioning this. They're all questioning it. These tier one customers that implemented 15, 20, 30 years ago are questioning whether they still need to be on that platform. Peter Nicholson (05:17) What are some of the reasons why there may be a business out there that needs to downgrade? Now, I'm going to continue to use downgrade, because I think we should call it out as it is. It's not downgrade in terms of. less features and stuff but there's so much marketing out there that blurs this type of project where they call it a realignment or a reassessment or right sizing you know fit reassessment we want to make sure that we're focused on there's a reason we need a smaller ERP so i'm going to be contrary and just continue to say downgrade Nirav Shah (05:52) Mm. Peter Nicholson (05:53) because I want to make sure we're doing this not because we want to move on to a newer one and it just so happens the newer one is smaller. We're actually wanting to move on to a smaller one. That is the purpose of that. So with that line of thinking, One that I want to probably start with, because I think, Nirav, you mentioned it. few episodes ago around just being sold something too big. They overbought, right? They had a flashy Nirav Shah (06:18) Mm-hmm, mm-hmm. Peter Nicholson (06:20) tier one vendor turns up, great team, took them out for a nicer fancier meal, a nicer restaurant. And ultimately, I think you said that you had someone that actually they could have just gone with BC. So let's talk about that - over- buying. Nirav Shah (06:36) I mean, I've seen, like I said, that example. There was a customer that got sold F and O. F&O S C And it was five users. Five users using F&O Emily Browning (06:45) Ha ha ha. Nirav Shah (06:47) SCM Like literally. I don't know if they were on a time crunch or didn't really, you know, ask the right questions and they jumped into it. implementation took over a year for five users. Like that that's To me, you're way oversold, right? Software at that point. something like Business Central could have done the job easily. a tier two solution could have done it easily. so sometimes these customers don't know what they don't know. They rely on friends of a friend, right? Your friend that has a business, you know, you have a business, and your friend's saying, Hey, look, I just got on F&O. You should really look at it", but that doesn't easily correlate. Maybe that that person who gave you the recommendation has a hundred people. has 200 people, right? Has is maybe a billion dollar organization and and and you that's looking for an ERP's offer, maybe you're five million dollars, right? Just doesn't equate that way. so you know, that's one thing. And the other thing is when you're downgrading, if we're calling that right now, right? We're calling it downgrading, it it could be that you went from full manufacturing to co becoming more of a Distributor, because you outsourced your manufacturing. You no longer do it in-house anymore. Right. Maybe you did that at some point. You had machines. You actually produced a finished good. And now you found a cheaper resource in China and decided to outsource the whole thing. And you just buy raw materials, it goes straight to the supplier. They produce it. You bring it back in-house to do the distribution , warehouse and distribution. So yeah, why use those manufacturing modules? Why pay for those manufacturing modules if you're no longer going to use it, right? so those are, you know, kind of quintessential, I guess, ways where you could see this, you know, kind of your current ERP being a a big overhead on your balance sheet, Your P and L. And where you need to maybe cut that down a little bit to to keep it more realistic to what you're doing now. Emily Browning (08:36) I can completely see how it happens because often the people making these decisions are not, you know, not us, the people in our roles in the business. It could be controller, it could be your operations manager. That person's job is not to know ERP very well. So I can absolutely see how it seems like a solid and safe choice to go for a big name. you know, maybe you don't you don't know everything about it, but you're safe. with that ERP. And to a point that's true. We're just talking about the way in which it's been oversold. And I think costs as well can be crazy. Even if this was a decision, you know, from back in the days of perpetual licenses, the support and access to upgrades can be absolutely crazy. So you still have to pay for support and within that, that's usually where you get your access to your upgrades, patches, things like that. and even if you say, well, you know what, we we you know we don't see ourselves upgrading in the next five years. So why do we need to keep paying that? Well, because in five years, when you do decide to upgrade, you're gonna have to pay the backlog of five years that you didn't pay for. So whatever happens, you're going to have to pay that. And often we're talking about hundreds of thousands of dollars, which which is a lot. It is a lot. And there are there are cheaper options that are really, really good options as well. Nirav Shah (09:55) Yeah. I was just gonna add to this is the the ecosystem, the ERP ecosystem is very deep now. There's industry specific ERPs. There's right, like they're talking about tier one is I feel like getting a new publisher every other week. tier two is getting a new publisher every other week. There's a lot more to choose from, I think, than there was before. So I think that is also probably one of the main drivers is too because the there's more Options for customers now when they're looking for ERP systems than what there was 20, 30 years ago. So to have that conversation of do we need to be on what we're on now? Can we move down or maybe de-scope, right? Maybe instead of downgrade, de-scoping, move that down an ERP system that's a little bit more manageable, a little bit more cost effective for my business, and go that route. Peter Nicholson (10:42) I was doing some research before starting when we're talking about categorization of ERP and I stumbled across the Panorama Consulting Group's yearly ERP Nirav Shah (10:52) Mm, mm-hmm, mm-hmm. Peter Nicholson (10:55) thing they put together, right, the ERP report. Nirav Shah (10:58) Yeah. Peter Nicholson (10:59) And it's quite interesting the way they've done it this year. It's slightly different from previous years but they do call out quite early on. kind of splits between tier one and then they have upper tier two and lower tier two. So I'm gonna just call Nirav Shah (11:10) Mm, mm. Peter Nicholson (11:11) out if people don't know what we mean when we're talking about, what do they mean tier one, tier two? What the hell does that mean? Nirav Shah (11:14) Yeah. Peter Nicholson (11:17) Well, tier one here says "systems designed for enterprises more than 750 million in annual revenue." Remember, take that with a pinch of salt. There's multiple things that can. need to be factored into that. "Most enterprises of this size are complex either due to complex operational processes or complexity in their entity structure and consolidation needs. Tier one applications address multiple industries and scalability. Examples, SAP S4HANA. Oracle Fusion Cloud, Info Cloud Suite", the big ones. Upper Nirav Shah (11:52) Mm-hmm. Mm-hmm. Peter Nicholson (11:54) tier two, they are categorizing these as "systems typically serving small to mid-size operations between 250 to 750 million revenue annually. Organizations of this size may encompass multiple industries and multiple business units. Examples, IFS Cloud. SageX3, Nirav Shah (12:14) Hm. Peter Nicholson (12:15) Epicor Kinetic, Microsoft Dynamics 365 Supply Chain Management, Microsoft Dynamics 365 Finance." Lower tier two, "small to mid-size again, but 10 to 250 million. These ones tend to be one industry typically, single entity to manage. That's where we find NetSuite, SysPro, Acumatica, those kind of people. Nirav Shah (12:34) Mm. Yeah. Mm hmm. Peter Nicholson (12:38) So Nirav Shah (12:38) Mm-hmm. Peter Nicholson (12:38) that's what we kind of mean by tier one and tier two. So I think that's quite a useful separation when we talk about tier one and tier two. Now, what do you think about that? Do you agree? Nirav Shah (12:49) I I I I I I think I I agree with the list. I think the list is spot on. However, I think the third party ISV market shakes that up. Like you could have, you know, Acumatica as being the mid tier two and let's say you need multi-entity functionality and that's the reason why, there's IFS out there, right? Or you have Epicor Well, there's a a really good third party solution in the Acumatica ecosystem for multi-entity. If that's the only thing you need, and that's a big part of the project, but the rest of the of the of Acumatica is actually good for you out of the box, then why bother looking at that tier one? Right? That's where there was a big gap in the past where this this this robust kind of third party marketplace didn't exist. and now since it does, I would challenge, folks out there to find a a mid-tier two solution that can't kind of do almost like 90%, 95% of what tier one could do, but add the proper third-party ISVs you need to make that comparison. And I think nine times out of ten, you're gonna realize, you know, the mid-tier two is a good place to land. Peter Nicholson (13:59) mic drop. think that kind of sums it up. Emily Browning (14:01) Mm-hmm. Peter Nicholson (14:02) the that for me is the biggest point. Absolutely the biggest point because otherwise Nirav Shah (14:02) Yeah. Peter Nicholson (14:06) and we're talking about fit here right how how much of what you're paying are you actually using and that's exactly it's like Acumatica, no we can't do that because it doesn't do this one thing - well there's going to be an Nirav Shah (14:17) Mm-hmm. Peter Nicholson (14:17) ISV out there that can And Nirav Shah (14:19) Yeah. Peter Nicholson (14:20) instead of going, now we need one of these tier one SAP solutions because it has this one thing. It also has 17 other things that we're going to pay for that we're not going to use because we don't need that. And Nirav Shah (14:31) Right, right, right. Peter Nicholson (14:33) I think also the flexibility that you get with something like Acumatica, it's so much easier, isn't it, to than it is to find out six months down the line, do you need to do a customization to SAP? That's going to be months, lots of money compared to Acumatica, which is going to be simpler. You've got more flexibility. It's going to be quicker to implement. I don't think a lot of companies would think about that. They would just go to acumatica.com, look at the list of features. doesn't have that. Another Google search. SAP has it. Nirav Shah (15:05) Right. Right. Emily Browning (15:06) I also, I don't think it's missing that much. You know, on your list, also for me, that was the one that jumped out where I thought, does it belong? You know, does it belong there? It definitely can handle the complexities that we're talking about at that sort of upper, upper tier two. but it I from what we've said so far, it kind of sounds a little bit like, okay, if you buy Acumatica and also these five third-party add-ons, then it will work. And that's not the case actually. I think maybe you would need one or two, depending on what level of complexity that you you were going for. but while yes, it's relevant. it's not that it doesn't have all the basics there already. It just may maybe that you need an area to to work, to be a bit deeper, a bit more complex, but certainly not tons of third party add-ons just to get it working. Nirav Shah (15:51) Yeah. I I would also say if you're in that first ERP twenty, thirty years, right, and you're looking for the next one. We did an episode on this, right? How your second ERP migration is gonna be easier than the first. look at a tier two. Don't just look at a tier one because you're coming off of a tier one, right? there's a lot of value In the tier two market space with ISV solutions that could fit all the needs that you had with your tier one ERP and give you more, plus more, right? So, you know, if you're in that kind of phase of the business decision-making process where you're looking for your next ERP, look at exactly how much of your current ERP you're using. I think, you know, Peter, you said that rightfully, right? Look at what you're using. if you're not using it all. Kind of write that down, jot that down, right? What modules are you using, which modules you're not using right now? where'd you do customizations? you probably have some customizations in your current ERP system. What type of customizations have you done? which ones are are you still using, which ones are you using, which customizations? So I think that first step of really analyzing your current ERP, tier one ERP, and then going down the research path and finding the tier two ERP that'll be a close. similarity to that tier one, but then also which third-party solutions you could add on to round it off to make it a complete product, might be the right way to go, right? You save save cost, you actually use more of the software instead of less of the software and might be easier to use for your users, right? There might be a lot more functionality on the AI side. So I would say, you know, there's some homework that needs to be done there instead of immediately saying, you're in tier one, get off of it, move to tier two. Right. I I don't know if that's the message that we're trying to give here. I think the message is here, you know, check these other boxes, right? Review these other other things that you need to do for your analysis first and then determine which proper correct tier two solution would be the best fit for you. Emily Browning (17:41) What do we think about cost here? Because in that upper tier two list, those are some wildly different priced products there. I think you had Epicore Kinetic, IFS Cloud. Did you have dynamics Peter Nicholson (17:55) Yep. Emily Browning (17:56) in there? Peter Nicholson (17:57) Yeah. Dynamics SCM. Well, they've actually put Microsoft Dynamics 365 finance separately and then Dynamics 365 supply chain management. So F&SCM. Emily Browning (18:08) Okay. But yeah, some wildly different pricing options there. I think a little bit of extra nuance in this day and age is also cloud and the c cloud subscription costs as well. which I think for some makes it a bit of an uplift, and others not so much. So that is a new a new bit of nuance to to consider in all of this as well. Peter Nicholson (18:29) when we were talking about that, I'm thinking of like, you know, you guys know me, I love an analogy. If I can get one in there, I'm thinking about, Nirav Shah (18:35) Mm-hmm. Peter Nicholson (18:36) if you were buying a car, right, it might be a, you know, you've got a seven seat, a SUV for the kids. That's what you needed back then. They've moved out. You've downsized your house. Now you've got a car that you're paying seven seats worth of, of fuel for. It doesn't fit in the garage anymore. You've got all of these features you don't need anymore. You wouldn't just go, yeah, regardless, SUV, I need another huge car with loads of seats, right? You would look at what is available nowadays. If you bought that 10, 15 years ago and you're looking for a new car, one, you're gonna, just like ERP, you're gonna be surprised with how much is now standard. You you might have had that old 15 year old SUV that you customized by putting in a CD player, right? You go, well, that's standard now. Actually, it's not, it? Even Nirav Shah (19:24) Yeah. Peter Nicholson (19:25) the CD, we've gone past CDs. But you know what I mean? Like... Nirav Shah (19:27) I was gonna say C D what is what is that? What do you what is that, Peter? I haven't heard of that. C D's haven't haven't heard of that before. Peter Nicholson (19:33) But you'll be looking for the features that you're kind of used to. Like where's the handle for the window gone? Well, now it's just a button. Now it's not even a button, right? It's just called aircon. So it's the same kind of thing when you're looking for a new car. you should look at other offerings. it also works the other way around, right? We've only spoken about it coming to us. Like what's the fit? Let's look at the market and let's look at tier one, tier two ERP. Look at the features. Does that fit my business? How much am I utilizing off those features of those ERP. What about the other way around? And Naraf, said this earlier around, you know, the business only had five people looking at F&SCM What about us feeding it, right? With a huge tier one ERP, oftentimes the right business for that would have huge teams of people, full departments of people, feeding information, updating records, maintaining master data. When you're a business that actually would be much better on Acumatica, that kind of team often are small. You don't have the resource to be able to feed your ERP with good data, with complete data, have time to... you know, make sure the master data is still current and correct. So are there any kind of telltale signs when you're going out there? Obvious one is how big is your business, right? If there's only five people, you're not going to be looking at SAP. Nirav Shah (20:58) Mm-hmm. Yeah. Peter Nicholson (21:00) But are you thinking about what this team now will have to do to feed to the ERP data rather than what the ERP can do for them? Nirav Shah (21:09) Yeah, I'm kind of looking at it both ways. because I think data is always changing, right? it you know, the way you work with your vendors, the way you work with your customers, your logistic company, you know, new improvements you do internal to the business, data is constantly changing. I don't think there's such a thing as saying set it and forget it when it comes to data. right, Peter. So there I think that that piece of it is status quo, regardless of what system you're in, the maintenance of that data. now there could be some automations and things and maybe some predictive analysis that could run with some newer newer ERPs out there that could look at trends and velocities and and make decisions for you through AI. but I think that that maintenance piece stays the same. However, the other piece of it, how you could take that data and use that data for your benefit, understand better gaps in your business. blind spots, you know, where business is changing, where you need to get rid of a division potentially, right? That's all things. I think the way the the newer ERPs, the tier even tier two ERPs here, do that, and they do that really well. Right. I think you're replacing data, I think you're you're replacing kind of that, I would say more of an archaic role, a little bit of data management. with like a true data analyst of that information to you know make better decisions and we've talked about this from day one if that data just stays on the shelf is collecting dust right like anything else at on a grocery store it's gonna expire you're not gonna be able to take advantage of it you need to have that data be live and it has to be actionable really fast as soon as you start recording it in your ERP system. So that's where I think there's a crossover. I feel like, where tier one systems had more of that, you know, kind of just straight data I guess data management or data entry kind of person making updates where now you have predictive analysis, you have AI, and then you have data analysts, where you could actually bring that data, bring that data to life. I did I did come across something here that I want to talk about. There are some Linear paths when it comes to looking at tier one and tier two, right? And some of the examples that I was able to find through some some experiences, some stuff that I checked on the internet, what I call crossover paths, where if you're on, let's say, QAD or IFS, Acumatica is the right approach for you, right? If you're on Epicore Kinetic. Maybe business central is the right approach for you based on the business central functionalities. if you're on SAP ECC, right, moving to Acumatica or Business Central might be the right option. Or maybe even SAP one. Now, SAP has a mid-tier solution called SAP one, right? JD Edwards. I've taken customers off of JD Edwards and moved them into Business Central. Right. And there, there's another option to also go into Net Suite. So there are some kind of linear paths here that you could research and follow. Like if I, you know, wanted to get off my tier one system, what is the right next system for me to be on and start there, start looking at that and determine if that's the right place for you to land. so maybe that reduces your research a little bit. So I wanted to mention that cause this is becoming more and more common, right? out there on how people are thinking about do I need to be on this this tier one solution that we're on. that still has Peter Nicholson (24:28) Mm-hmm. Nirav Shah (24:28) some green green letters and they have to print it on dot matrix printers and things like that. So Peter Nicholson (24:34) Mm-hmm. Emily Browning (24:34) So do you think there's any 'cause I think this would be a quite a logical thought process. Do you think there's any good reasoning behind sticking with the same type of provider, but going for one of their lower tier products. So you're on F and O, you could think, well obviously let's go to let's go to Business Central, or you could be on JD Edwards and think, well, let's stay with an Oracle, let's go to NetSuite. Is there ever any good good argument for that in and of itself or should the other options within that tier kind of get a get a similar look in? I know my own opinion, but what's yours? Nirav Shah (25:11) yeah, I I think I think that's a logical place to start. to say, is there a a clean path? From my experience, there's not. It's two totally completely different database structures, architectures, strengths, and weaknesses at the end of the day. An example here is in our world, is companies that try to go off of dynamics GP, because that's being sunseted, right? 2029. And decide, hey, we should automatically go to Business Central. I don't know about that. I don't think that's a clear kind of migration. GP was very strong in projects. It had a lot of like project specific functionality, did really good things in in terms of that functionality. Business Central, not so much. it's getting there, but it's not a path that you could just say one to one. There's there's a big migration. project that happens between that. So I would say no in this in for your question, Emily. I think it's worth looking at other solutions outside of your publisher, that offer other solutions out there because so much has changed that you would just be doing a disservice, I feel like, if you don't if you don't give a good run at different solutions to see how closely they'll match your business. Emily Browning (26:19) Mm-hmm. I I agree. it's a solid option, but it's not inherently easier than than any Nirav Shah (26:25) Mm-hmm. Emily Browning (26:26) other option. Nirav Shah (26:28) Yeah. Yeah. Peter Nicholson (26:29) The risk is thinking that it is the same. Emily Browning (26:31) Mm-hmm. Peter Nicholson (26:32) Going into it and going, yeah, well it's the same, there won't be any issue. There will be. We've even seen it Nirav haven't we? From someone going from an on-prem version of it to on-cloud. The database structure is different. You do not have, Emily Browning (26:46) Mm. Peter Nicholson (26:46) oftentimes you do not have direct SQL access to the databases. Suddenly all of your Power BI reporting or jet reporting is broken. Nirav Shah (26:54) Exactly. All of it's different, yeah. Peter Nicholson (26:54) Tables are different, columns are different. Calculated columns that were being done by the on-prem ERP isn't done in the cloud now. It ends up breaking everything. go, yeah, BC to BC, fine. Or 2018 to BC is fine. No. Nirav Shah (27:08) Yeah, no, it's not. I I look at it this way. Here's an analogy, Peter. You love analogies here. I'm not very good at golf. I think I am. So just because I shoot, you know, bad on one golf course doesn't mean I'm gonna be great on another golf course. I'm probably still gonna be bad. So you know, you kinda have to like look at it that way. You have to give yourself a shot here Peter Nicholson (27:27) Yep. Nirav Shah (27:27) and and and research as much as you can. Not where you get there's information paralysis where you research so much and you're like, yeah, I don't want to move anywhere. I just want to stay in my own system, right? That's another thing too. I love it, you know, I see customers research the heck out of the market. And in their head, all of a sudden they have this like perfect ERP system that doesn't exist. And they're like, you know what? I'm just gonna go ahead and and stay where I'm at. So you you kind of have to find the best fit unless you're gonna, you know, build your own, which I highly suggest against any company doing that. Don't build your own ERP system. But, you know, use something that will go ahead and get you at least eighty percent there and then look at the third party ISVs to to help bridge those gaps that you have. So now you have a complete solution. You're not paying, you know, the tier one price tag at the end of the day, right? You're paying, you know, something to actually gonna use. You're gonna use all parts of the system. Peter Nicholson (28:16) My advice to you then would be maybe you need to downsize to pitch and putt or crazy golf. Obviously a full 18 Emily Browning (28:21) That's what I was thinking. Nirav Shah (28:22) Yeah. Peter Nicholson (28:24) is just too big for you. It's not the right fit. You're not feeding it the right score. Nirav Shah (28:26) Yeah, I know. Yeah, it's not. I know. Yeah, Emily Browning (28:30) There's not not enough clowns and dinosaurs. Nirav Shah (28:33) I love s I love spending the extra money, Peter. I Peter Nicholson (28:37) Yeah, exactly. Yeah. Yeah. Whereas you could just go down to a crazy golf, you know, like $5 per round like, Nirav Shah (28:41) Yeah. Yeah, exactly. Exactly. I I should do that, but I just love spending the extra at the end of the year. It just looks so flashy on my PNL. Peter Nicholson (28:52) All right, here's another one that I thought was quite interesting when I was thinking about this. And I always think back to this. When we come to ERP migration, and we want to have a look at many new ERPs as we can, it's been 10 or 15 years since our last time that we were looking at what's available, we're kind of going to be looking at everything. we don't know what tier one and tier two means. We're just looking at SAP. And then tomorrow we're looking at Acumatica. We're just seeing them both as an ERP, right? I always think back. My issue through a recent migration from Nav to Acumatica, I was so pissed the amount of times I heard people saying, "yeah, well, you know, here's my issues with NAV. It doesn't do this and it doesn't do that." And I'm sitting there going, does. It absolutely does do that. It has that feature. You've just never used it. Now it's easy to blame the end users and go, "well, you're not curious enough. You're not bothering to look. You're too lazy to go and look at if this feature exists." I still stand by that there is a part of that. But also I don't think you can necessarily always blame the end users because oftentimes with churn of people, a lot of the training on ERP is done from one person to another, from one end user to another, not often by... the guides and the instruction and the tuition available from actually from the ERP vendor themselves. So you end up not remembering or losing sight of some of the features that are in there because, No one remembers like all of these kind of features. Everyone always remembers the limitations, right? They're like, well, you know, someone was told in 2014, it doesn't do this. So we have this Excel, they were told incorrectly, because the person in 2011 didn't tell them about this feature. So you end up with feature loss just as people, you know, forget some features, but just remember the limitations. So I think back to that, because you know, people can be great if the new ERP would have this and would have that. It's easy then to go and have a look at a huge tier one ERP and go, holy shit, it's got all of these things. Not realizing that one, your old system had that. And two, something like Acumatica probably has that as well. So I think that's one aspect that could push people. to think they need a bigger ERP. They see bigger ERP, more features. They don't actually think, my current ERP, we've slowly stopped using some of the features because of people forgetting, because of people jamming in, know, Mike's Excel spreadsheet he built in 2013. Emily Browning (31:29) I totally agree. and in the same boat, I've been thinking about the same thing, but you know, these overly customized old ERPs. I've certainly encountered it with perfectly good ERP systems. I can remember a particular example with QAD and everybody hated it, nobody trusted the data. I think everything was just being done in Excel. There's nothing wrong with QAD. I think even one of them had a family member who was a QAD consultant, so kind of had this knowledge like, Isn't it supposed to be good? Isn't it supposed to be able to do all of this? Why doesn't our version do it? Well, for exactly Nirav Shah (32:01) Mm-hmm. Emily Browning (32:02) the reasons Pete just said, and also because, you know, we've jammed in all of these customizations when we didn't really need to, maybe misguided by an implementation partner or something in the past. Nirav Shah (32:11) Yeah. I mean 80% of Excel spreadsheets have errors. Right. We know that, Peter, one of our first episodes we talked about this. So, you know, it's once the confidence starts losing, everyone's crutch is gonna be Excel at the end of the day. And confidence just doesn't have to be with with data and I think in the system. I think it could be that there's a a true barrier with the ERP system. It's just too too many clicks. it's just difficult to add data. you know, maybe there's It's it's hard to navigate through the firewalls or wherever you're trying to access the ERP from, right? The tier ones you have to go through VPNs and they're on premise most likely and it just becomes a barrier to to them doing their day to day job. So Excel becomes a crutch and then that that that just continues on forever and ever and ever and ever. and and then the ERP just starts getting outdated Peter Nicholson (32:57) funnily enough, I recently had it last week, I think it was, with Acumatica. This is how quickly it can happen. And maybe you need kind of an ERP owner or someone that's the ERP expert within the business. Because I had it last week with a customer where I was suggesting that they look at automation schedules in Acumatica. where instead of manually having to print to screen a sales order acknowledgement, type in the email addresses of who they want to send it to and then click the send button. We could just automate it on an automation schedule. Every 5 PM, any new order that's gone on that day, it pings out the sales order acknowledgements. obviously that's like the same as just clicking the email button, right? You put an automation schedule on that email button. And I said, obviously you need to make sure that your customer records have. on the mailing and printing tab, right, has a contact assigned as a recipient to that particular mailing profile or email template. They came back when, yeah, well, obviously we can't use that because that email function, it can only send to one recipient. No, we can't. Nirav Shah (34:10) Mm-hmm. Peter Nicholson (34:11) You can have lots of people in the to address. can put them in the CC, the BCC. You can even select whether they get it in PDF or HTML or Excel format. Like, where did this come from? someone else told me that. This company Nirav Shah (34:25) Mm-hmm. Peter Nicholson (34:26) has only been on Acumatica for about a year, right? And it's like, Nirav Shah (34:30) Mm-hmm. Peter Nicholson (34:30) now it's already, I can't do this, I can't do that. Where did that actually come from? And it's easy to... blame the person, right? And go, well, you weren't curious enough. You didn't bother looking. You didn't go to the help section to see how to set up such a thing. But if someone else has told them, It's this like folklore around what your ERP can do functionally that can end Nirav Shah (34:50) Yep, yep. Peter Nicholson (34:52) up over time compounding, going up to the stakeholders and going, yeah, well, you know, my company's moaning about all of these features they need. And they would love to have, but their current ERP system doesn't do that. We're to have to look at bigger. We're have to go, you know. on the other end of this. Like, where does this come from? This is, I'm Nirav Shah (35:09) Yep. Yep. Peter Nicholson (35:11) trying to not make this just Pete moaning I wish I was. It's just like, Emily Browning (35:12) I can picture you shaking them. Nirav Shah (35:15) Ha ha Peter Nicholson (35:17) here's a great automation you could do. You just need to change Nirav Shah (35:20) Mm-hmm. Peter Nicholson (35:21) and just make good master data, right? Just make sure you, and it's like, no, it can't do that. Well, one, I've got pissed off. You're telling me the guy that loves Acumatica, lives and breathes Acumatica can't do something. But also it's like, Nirav Shah (35:30) Yeah. Yeah, yeah, yeah, yeah, yeah. Peter Nicholson (35:34) where does this weird folklore come from? And it's these small Nirav Shah (35:37) Mm-hmm, mm-hmm. Peter Nicholson (35:38) bits of made up limitations of your current system that can easily translate to, we need something bigger than we've got. And it's not always that case. Nirav Shah (35:50) Yep. Yep. Emily Browning (35:51) I've got a question about the project itself. Am I jumping ahead? Do we have more on the lead up to the project? Peter Nicholson (36:00) No, it's just otherwise it's going to be me moaning about people underutilizing their modern ERP. Nirav Shah (36:03) Yeah. Emily Browning (36:06) Slowly putting on more Acumatica memorabilia. Where's your hat? And I I think that's a that's an Acumatica t-shirt, isn't it? I recognize the colour. Peter Nicholson (36:13) It is, yeah. Nirav Shah (36:13) Yeah, yeah, yeah, yeah. That's hilarious. Emily Browning (36:17) anyway, so my question, I don't think I've ever been involved in a downgrade project using the definition of downgrade that we've stated for this episode. So is there anything different, anything to look out for? in a downgrade project versus a normal one. Nirav Shah (36:35) I would say, yeah, it's I think I think in my eyes, this is a re-evaluation of your processes. and not taking what you're currently doing because that a lot of that could be based off of functionality or module constraints. but really reevaluating your processes and And and doing a implementation of those revised processes. Maybe not so much data in this case, because the new implementation, it's data and process. I think data is is should be fairly clean if you're coming from an ERP system, unless you're using Excel as a crutch everywhere in the system. Then yeah, I think it's a data migration as well, data implementation. But assuming that you're open to Tier two functionality is to reevaluate your processes and implement those maybe more updated Emily Browning (37:31) Mm-hmm. Nirav Shah (37:31) pieces of the business correctly, seamlessly, a lot more efficient in a tier two ERP implementation. Cause I mean, they're coming off of an ERP system. So the, you know, AR, AP, usually those those things don't get touched. Those are good across across the board, right? doesn't matter which ERP system you're using. But it's a lot more having to do with inventory control, warehousing, manufacturing, shipping, receiving, you know, product data management, integrations with like CAD systems, CRM, right? All the like really what I call you know, really detailed information that helps many people in the organization do their jobs is is what you really want to focus in on to get them on board. Where we reevaluate the processes and it's much easier in the next system that you're bringing on. Emily Browning (38:14) I could imagine there's functionality also that maybe maybe they currently have or like they know that they should have, but it's not working now for whatever reason. And actually in the project, we could we could actually just get rid of that. Do we do we really need that? I can think of an example that I've experienced actually where they had some kind of like a counter on the machines that would feed into the ERP, but they weren't doing anything with that data. And they didn't have any plans to Nirav Shah (38:40) Mm, mm-hmm. Emily Browning (38:41) do anything with that data. So that really Nirav Shah (38:43) Right. Emily Browning (38:43) doesn't need to go into phase one of a go live of a project, but that's not something really the IT team can say it's a business process to to reevaluate. Peter Nicholson (38:52) I would also say whether you're downgrading or moving on to something bigger, the same core principles apply in data migration. Don't just think, we're moving from this gargantuan SAP that's just full of crap. We'll take what we need and just put that in the new ERP. You still need to do good master data management. Have a proper, it's another reset. Even though you're going to something slimmer, slimmer does mean better, right? Nirav Shah (39:21) Mm-hmm. Peter Nicholson (39:21) But still, you need to do the data cleansing. You need to think about what you are taking with you and what you're not. What now belongs into historical data for data retention purposes, regardless of you. moving onto whatever ERP you happen to be moving onto. It's still an opportunity to reset. One of the things I think Nirav Shah (39:45) Mm-hmm. Peter Nicholson (39:46) you should do is get a list of features of your ERP and go through and go, do I use that? Do I use that? One, you're probably going to stumble upon some and you go, I didn't know it did that. that's funny. Because of what I said, folklore and forgetting about some of the features. Nirav Shah (40:01) Mm-hmm. Peter Nicholson (40:02) And also, you're going to find out from a utilization point of view. My license, I'm paying every year to have this feature. Don't use it. I don't use that. Don't use that. Don't use that. Then you're going to have kind of a list. Maybe you should split that list and say, here's the things that we are using. Here's a list of, "man, if I only knew that it had that feature, we could get rid of a bunch of manual workarounds" and then some that's like "kill" Then go to, as Nirav, you said earlier, go straight towards Acumatica and have a look. Go, it does all these. It doesn't do this one. Let's have a look. Is there a third party solution I can bolt on? Because. you could be on the smallest ERP. There's no company out there using 100 % of all of the features of every module. There's always gonna be some Nirav Shah (40:48) Right. Peter Nicholson (40:49) that you don't. So you wanna limit that, because you're paying for every single one. It doesn't matter if you're on the smallest resource of Acumatica and you're just on a manufacturing edition, if you're not using ECNs, ECOs for engineering change management stuff. You are paying for it. So if you can limit Nirav Shah (41:09) Mm-hmm. Peter Nicholson (41:10) the amount of stuff that you're not using but you're paying for Then that's only going to be a win, right? Nirav Shah (41:16) Absolutely. Over overselling software is a big thing in the industry where a lot of customers get sold a five year kind of module plan when they need maybe, you know, much less than that for year one. so you know, I understand the excitement of buying what a five year plan looks like, but you kind of have to scale that back and saying, What is year one? What do I need for year one to run my business? And it's good to know that I could bring these other modules on in five years as my business grows or goes a different direction or whatnot. Peter Nicholson (41:47) Yeah. Nirav Shah (41:48) But it's a it's a really important concept to understand. Peter Nicholson (41:51) Yep. I think some of the caveats then, if we've got someone out there that is sitting on this gargantuan thing that like, holy shit, we're paying half a million a year for this, and we're using 10 % of it?" If there are people out there and they're now thinking, maybe I need to have a look at what BC or Acumatica can do, or even Odoo or something like that. A few caveats, if you like, right, yep, cool, we're gonna do that. Either way, it's still an ERP migration. So don't think Nirav Shah (42:17) Mm-hmm. Peter Nicholson (42:18) as much as it is a downgrade, we can do this project on fewer people. You won't. You're just going to end up with Emily Browning (42:24) Mm-hmm. Peter Nicholson (42:25) the same people just doing more stuff. And if you have fewer people, you're going to risk a successful go live. And also, "ahh it will be simpler. We don't need to spend as much time doing discovery." like Nirav Shah (42:39) Hm. Peter Nicholson (42:39) no you absolutely do you still need to Nirav Shah (42:41) Yeah. Peter Nicholson (42:42) be running it as a serious migration project even though you're going to a smaller ERP Nirav Shah (42:48) Exactly. Exactly. Peter Nicholson (42:49) Any closing thoughts or who wants to summarize what we've spoken about? Emily Browning (42:55) Nirav's our expert, so I think it's for you to summarise. Nirav Shah (42:57) Yeah. Peter Nicholson (42:57) Yeah. Nirav Shah (43:01) yeah, I think this conversation needs to be on every table. for customers are using a tier one software right now. you would be doing a disservice if it's not a point of decision making here. you will find a lot of tier two solutions could do the job. And possibly in many cases better than maybe even what a tier one could do without less confusion and headaches and just overcomplication of your processes and customizations, right? and I know this because we deal in the tier two space often. you cannot make the jump from tier one to tier three. We know that, right? There is still clear boundaries between what QuickBooks could do and What SAP could do, even obviously for tier two for that matter. But you know, the the line's becoming blurred between tier one and tier two. a lot of industry-specific software out there. A lot of people in your organization, if you've kind of have newer folks than the first time you did the implementation, have better experience in technology, better experience in software, right? And have maybe come from specific software that may benefit your business. Put all that on the table. so You don't have to live with what you have right now if you're a tier one customer. it's worth exploring out there because there is a slew of other solutions out there that in my opinion are are worthy of conversation. Peter Nicholson (44:24) Also, I think people should be mindful of... You know, if you do move to a smaller ERP, yes, it's easy to go, our license costs are going to be cheaper, but it's more than that. We said it at the start of this, that typically a smaller ERP gives you more flexibility. you're almost like buying a shorter feedback loop, right? When we talk about customizations and stuff, trying to customize a huge enterprise level SAP style ERP is often not just more expensive, but also much, much longer. as well. So it's not just you're buying cheaper software, you're buying the flexibility, you can own more, you've got a shorter feedback loop, you can easily monitor these kind of things. I think that's a big win as well. Emily Browning (45:07) Yeah, you know what we didn't talk about was these these big names. you're such a small fish in an ocean to them, it's it's really inaccessible in terms of getting being listened to at all. That's not to say with all smaller ones, you're just going to be able to call up the CEO. But if I if I look at Oracle, I I struggle to be able to to get them to do my renewal and let me pay them more money. they can be really difficult. To get hold of some of these larger companies, whereas the smaller ones, you can go to a trade show, you can go to one of their events, and you can speak to some relatively high-up people. So if you're trying to get some kind of influence, be listened to, you're having a problem, in my experience, a greater chance that you'll feel that they care. Nirav Shah (45:51) Mm-hmm. Emily Browning (45:52) I can't compare them all directly because because I don't know, but certainly the feeling to me as the customer is that I can get through much better to the smaller players in the game. Nirav Shah (46:02) Yep. Yep. Peter Nicholson (46:03) I think that kind of does it so should you downgrade well again it's not a clear-cut thing but I think you should definitely do some of the things we said go and measure your current ERP utilization print out lists of features mark every single one and also look at what's offered out there that I think it surprised a lot of people some of the native functionality that you see in smaller ERP offering. bigger doesn't always equal better. It's how you use it. Nirav Shah (46:28) Mm hmm. Peter Nicholson (46:33) with that said, if it turns out that you do need to move, reach out to us for advice. Always look at the ABCs of ERP and beyond. Heading towards 90 episodes now. So we have a backlog, a wealth of information from everything with. change management, how you look at what's out there, how you even run such a project. Whether this is your first episode or if you're a regular listener, do make sure that you like and subscribe wherever you find the show. The show is on Spotify, Apple. We put the video up on YouTube as well. We don't do any adverts. We're not sponsored. We're certainly not ever going to be sponsored by Starlink or Nirav Shah (47:16) Yeah. Peter Nicholson (47:20) that non-ERP. Trying to not mention them again. Otherwise, Emily Browning (47:20) Quick books. Nirav Shah (47:22) Quick books. Peter Nicholson (47:26) look, we know AI is there. It's probably scraping transcripts. If we continually say QuickBooks, it's going to start advertising QuickBooks. And that's definitely not what we want. Nirav Shah (47:34) Ha ha Peter Nicholson (47:36) But either way, yes, make sure you like and subscribe. Nirav's team can help you if you are looking at a downgrade. Are you stuck on an archaic huge ERP? Then reach out to him at adcirruserp.com They do exactly this. He's not paid me to say that yet. Four seasons Nirav Shah (47:55) Ha ha ha. Peter Nicholson (47:56) in and the invoice is way overdue. Nirav Shah (48:00) Yeah, it it really is. It really is. Peter Nicholson (48:03) But with that said, thank you both of you. I'll catch you in two weeks. Emily Browning (48:07) Thank you. Nirav Shah (48:07) Thank you. Emily Browning (48:07) See you then.