ERP Outages: It’s Like Losing Your Cell Phone but Much More Disastrous

Let’s set the stage: You’ve implemented one of the top ERP systems and it’s finally up and running. Your teams have grown familiar with the new tool, and they’re using it to work more efficiently and collaboratively.

Then, the unexpected happens.

You experience an outage, and the system is temporarily down. Could your operations continue?

An ERP outage doesn’t have to mean disaster. Today, we’re sharing a few steps to put in place to minimize the impact of a potential outage.

Types of ERP Disruptions

When it comes to enterprise software, there are two kinds of disruptions that could occur:

• Planned outages
• Unplanned outages

As their name implies, planned outages are anticipated and deliberate. They’re usually scheduled at a convenient time to minimize the effect on your team members.

In theory, your organization will have safeguards and protocols in place to ensure operations can continue during a planned outage.

It’s the unplanned outages that could potentially disrupt your workflows if you’re not careful. These are outages that occur without warning and are usually caused by the failure of a critical system component.

Reasons for unplanned outages and disruptions may include:

• Software problems
• Hardware issues
• Issues with people and processes
• Natural disasters and severe weather
• Geopolitical conflict
• Cyberattacks

Unplanned outages often stem from some type of application or software error. At the same time, those outages can also be the result of operator error or unplanned user behavior, such as:

• Changing system components
• Not executing critical tasks
• Executing tasks incorrectly
• Executing tasks out of sequence

Regardless of the culprit behind the breakdown, the consequences can be detrimental. Let’s look at what could happen if an ERP outage occurs at your organization – and you’re not prepared.

Consequences of ERP Disruptions

When disaster strikes, the outcome can be widespread. You may not even notice the full scale of the effects until later.

Without a recovery safety net in place, unplanned ERP disruptions can lead to the following consequences:

• Loss of revenue
• Employee downtime
• Reputational damage
• Customer frustration

It’s important to prepare now for any problems that may occur down the road.

ERP Implementation Best Practices for Preparing for Disruptions

1. Update Outdated Infrastructure

When technical ERP issues occur, the problem is sometimes the outdated infrastructure surrounding the system.

During an ERP implementation, it’s important to assess your legacy systems and infrastructure. Have you pushed critical updates to the backburner to conserve costs?

While you might want to focus on the new software you’re implementing, it’s just as important to focus on your existing systems. Outdated systems not only pose security risks, but they could lead to challenges with data backup and integration. This can impede your day-to-day operations and weaken your ability to navigate disruption.

2. Understand Uptime Agreements

As you’re reviewing vendor service level agreements (SLAs), you may notice different categories and levels of availability. These guarantees can range from 95% all the way up to 99.999% (also called “five nines”).

For some software applications, three-nines coverage is all you need. For others, you might require four nines. To determine the type of uptime agreement you need, it helps to compare the cost of the agreement to the outage costs you could incur.

3. Avoid Stacked SLAs

While uptime percentage is an important part of your SLA, it isn’t the only one. Make sure to read through the agreement carefully to ensure you understand the terms.

As you do, beware of any vendor that offers what’s known as a stacked SLA. This is an SLA based on a service with multiple components.

For instance, you might invest in a cloud platform that has separate SLAs for certain services, such as network, computer, and storage services.

While this might sound permissible at first, think of what would happen if only one of those services went down. If you have a stacked SLA, that outage wouldn’t trigger an SLA violation as long as the other services were available. Thus, you wouldn’t have the right to any compensatory damages.

If you need assistance reviewing contract terms, look for an ERP selection consultant that has experience collaborating with software expert witnesses on software failure cases. Panorama’s consultants have waded through thousands of pages of software contracts as part of the discovery process in all the cases they’ve handled over the years.

4. Equip Employees to Respond

When an unexpected outage occurs, a prompt employee response can make all the difference. If your employees are trained in what to do, you can minimize costly downtime.

Discuss these questions among your project team:

• How critical is this system to the organization?
• Who will be affected if it becomes unavailable?
• What workflows can they use in the meantime while repairs are made?

Then, develop a communication strategy and training plan so employees know how to remain productive even when working offline.

ERP Outages are No Joke

The better-prepared your teams are, the easier it will be to navigate unplanned outages and disruptions.

While you might not be able to prevent every ERP outage, you can control the outcome. By updating your infrastructure, reviewing uptime agreements, fine-tuning SLAs, and training your employees, you can rest assured that disruptions won’t derail you.

Our ERP consultants can help you select and implement software while focusing on risk mitigation. Contact us below for a free consultation.