Philippine businesses are taking a harder look at expensive enterprise resource planning (ERP) upgrades as they try to balance digital transformation with growing investments in artificial intelligence (AI), automation, cybersecurity, and other business priorities.
Rather than automatically replacing existing ERP systems, more organizations are asking whether they can extend the life of their current platforms and redirect savings toward technologies that offer faster business returns.
The shift reflects a broader change in how enterprises approach modernization. Instead of following software vendors’ upgrade schedules, companies are increasingly making technology decisions based on business value, according to Han-tiong Law, regional CTO for ASEAN and Greater China at Rimini Street.
The trend is particularly relevant in the Philippines, where both government and private organizations continue to accelerate digital transformation. But adopting new technology alone does not guarantee better business performance.
Law noted a 2025 Asian Development Bank working paper showing that businesses benefit from technologies such as accounting systems, human resources platforms, and ERP solutions only when technology investments are supported by stronger management practices and improved digital skills.
At the same time, many organizations are questioning whether large ERP migration projects deliver the expected return on investment.
Gartner projects that by 2027, more than 70% of ERP initiatives will fail to fully achieve their original business goals because they are not closely aligned with business strategy.
“That underscores a growing reality for enterprises in the Philippines and across the region: successful ERP transformation is less about pursuing large-scale upgrades for their own sake and more about making deliberate choices that improve resilience, control costs, and free resources for innovation,” Law said.
Instead of replacing core business systems, many enterprises are choosing to optimize existing ERP environments while investing in AI, automation, analytics, better user experiences, and greater business visibility.
One reason is the growing cost of traditional ERP upgrades.
Law said many organizations feel pressured into costly “rip-and-replace” projects because vendor roadmaps present upgrades as unavoidable. These migrations often consume IT budgets and technical resources for years before organizations realize measurable benefits.
Rimini Street’s research found that 95% of SAP customers struggle to justify the return on investment of migrating to SAP S/4HANA, while 84% worry about the operational disruption such projects can create.
As a result, some organizations are considering third-party software support to extend the life of existing ERP systems instead of immediately replacing them.
According to Law, extending the life of stable ERP platforms allows organizations to reduce maintenance costs while redirecting IT resources toward higher-value initiatives such as AI, automation, and analytics.
Planning an ERP roadmap also requires avoiding common mistakes.
Law said many organizations wrongly assume that moving to the latest software release is necessary to improve security or support innovation. Another mistake is allowing software vendors rather than business priorities to determine technology strategy.
Instead, he encouraged business leaders to evaluate the full cost of ERP upgrades, including implementation expenses, operational disruption, long deployment timelines, and ongoing maintenance costs.
He added that modernization should focus on measurable business outcomes instead of following technology trends.
“Approach modernization based on real needs, operational excellence, agility, risk and compliance, reliability and customer experience, not hype,” he said.
The changing ERP landscape is also reshaping relationships between chief information officers and chief financial officers.
Technology decisions are increasingly becoming joint business decisions rather than purely IT projects.
Law cited a Censuswide survey of 255 financial services CIOs and CFOs across Europe, the Middle East, and Africa, where 87% reported stronger collaboration on digital transformation initiatives. The study also found that 71% of CFOs increased IT budgets, largely to strengthen security, compliance, risk management, and business resilience while keeping costs under control.
Vendor dependency has become another growing concern.
Organizations tied to a single software vendor often have limited flexibility and may face higher costs as they follow mandatory upgrade schedules.
Law said many enterprises are adopting a composable ERP strategy, allowing them to combine technologies from multiple providers instead of relying on a single platform. A Rimini Street study found that 78% of SAP customers plan to adopt this multi-vendor approach.
Several organizations have already redirected ERP savings toward innovation.
Standard Foods Corporation reduced its annual SAP support costs by 50% after moving ERP support to Rimini Street. The company used the savings to invest in AI-driven predictive analytics, machine learning, and supply chain optimization.
In the Philippines, HCX Technology Partners selected Rimini Street to support 60,000 Oracle PeopleSoft licenses. According to Law, the company redirected budget and IT resources previously devoted to routine maintenance toward automation, AI initiatives, financial systems, mobile applications, and other digital services.
With digital transformation remaining a national priority under the Philippine Development Plan 2023-2028, Law said organizations should view ERP systems as long-term business platforms rather than simply back-office software.
“Ultimately, intelligent transformation is about staying in control: decouple innovation from forced upgrades, lower TCO, and unlock more value from existing Oracle, SAP, IBM, Microsoft and Salesforce environments, so Philippine enterprises can innovate on their timeline while protecting stability,” he said.
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