Decline of ERP Value Through Application Erosion

ERP systems are comprehensive software solutions that integrate various business processes and functions across an organization. They are designed to streamline operations, improve efficiency, and provide better visibility into different areas of an organization, such as finance, inventory management, human resources, supply chain, and customer relationship management. ERP systems thus offer organizations tremendous value, particularly when they are used to their fullest potential.

CIOs often notice, however, that over time ERP system value tends to decline as users use fewer and fewer of their system’s functions. This phenomenon has been dubbed “application erosion”. Application erosion occurs not because ERP systems change over time and become less functional; it occurs because of how ERP systems are used.

How does Application Erosion occur?

There are a number of reasons why application erosion occurs, including:

  1. Forgetfullness: Often ERP system users get set in their ways and, over time, forget about many of the functions that they may have learned about or even used at one point. Users usually don’t deliberately decide to stop using certain functions—they simply forget about them. Use it or lose it…
  2. Staff turnover: Maintaining staff is a huge issue for many organizations because when employees leave they take with them considerable institutional knowledge, such as that of its ERP system. If an organization has a training program for incoming users, it is often the remaining users who do the training. The reality is, however, that the remaining users usually don’t end up teaching incoming users everything they know. As this process repeats itself over a number of years, third or fourth generation users often only have a fraction of the knowledge that first generation users had. This, of course, greatly contributes to a decline in ERP value.
  3. Business changes: In most organizations change happens slowly—and there is little in the way of planning to ensure that support for the ERP system reflects those changes. As a result, more business functions are done on spreadsheets, or even manually, and less with the ERP system. As a result, the ERP system shifts away from the needs of the business and its value declines.

How to prevent application erosion

Application decline kicks in the day your organization starts using its new ERP system—unless there is a plan in place to avoid this and the will to ensure adherence to it. And the key element of that plan? Training. Comprehensive and ongoing training is far and away the single most important strategy for combatting application erosion. If your organization has the capacity to invest in an ongoing formal training program for new users conducted by specialists in your ERP system you have a good chance of mitigating the impacts of application erosion. What’s more, you should consider retraining existing users so that they are refamiliarized with functions that they may have forgotten or stopped using for some other reason. Doing so can help reverse application erosion and restore ERP value.

It’s one thing to say that ongoing training is the solution and another for management to see the value in it. Ongoing training is not cheap and it’s sometimes hard for managers to see the value in it when their ERP system is operational and there is nothing happening that is forcing their hand. The decline of ERP value is often very and allowing it to continue is far more expensive than the cost of training.

Ideally, companies should proactively schedule ERP system training as part of a CANI (Constant and Never Ending Improvement) approach within their organization. CANI is all about making consistent, small changes, which is often more effective than trying to change everything at once. In Japan, the word for constant and never-ending improvement is kaizen. Not only is this an operating philosophy for modern Japanese businesses, it’s becoming the personal mantra of millions of successful people. Achievers—whether in business, sports or the arts—are committed to continual improvement. If you want to be more successful, you need to learn to ask yourself:

  • How can I make this better?
  • How can I do it more efficiently?
  • How can I do this more profitably?

When an organization initially implements its ERP system it invariably has “super-users” who know the system extremely well and are boosters of it. Super-users are great sources of knowledge and inspiration for other users. Are those super-users still with your organization or have they moved on? If the latter is true, it is vital that you create new super-users to slow down or reverse application erosion. This requires identifying staffers with the capabilities and character to assume the role and then providing them with the training they require. On top of this, it is often a good idea to formally recognize these people as super-users to instill pride in their performance.


Six S Partners’ ERP trainers are from industries that have leveraged ERP software to successfully improve their business operations. We can help any organization combat application erosion with their Epicor Kinetic ERP software. Click here to contact us to get the ball rolling.