Wake up, sleepwalkers: Why ERP modernization isn’t what it seems
Key takeaways
Radar Group’s latest research with Infor and AWS reveals a growing gap between ERP modernization and measurable progress.
- The average ERP is 6.4 years old, with 5.3 years of life remaining—showing that many systems are mid-life, creating a risk of stagnation without continued evolution.
- Just 41% of organizations say their ERP meets expectations, indicating that technology alone doesn’t deliver transformation without clear strategy and governance.
- Among “sleepwalkers,” 81% plan to increase overall tech spending, yet only 50% expect to raise ERP budgets—overlooking the platform at the heart of operations.
The result is what the report calls “The Sleepwalker Paradox,” where mature yet under-strategized ERP systems create the illusion of modernization. Companies appear digitally advanced but remain stuck in outdated processes and thinking—modern in appearance, but asleep to progress.
The illusion of modernization
Across industries, many organizations look like digital success stories. They’ve migrated their enterprise resource planning (ERP) systems to the cloud, retired legacy software, and checked every modernization box. On the surface, they appear ahead of the curve.
But according to new research from Radar Group in collaboration with Infor™ and Amazon Web Services® (AWS®), many of these same organizations are sleepwalking through modernization—appearing modern, yet missing the very progress they set out to achieve.
The report, ERP Modernization: The Sleepwalker Paradox, describes businesses that have moved to newer, cloud-based ERP systems but lack the governance, strategy, or intent to turn technology into measurable business value. They have upgraded their systems, but not their approach. Many are managing technology rather than driving transformation.
The research quantifies this gap, showing that for many organizations, modernization stalls halfway between promise and progress.
The data behind the paradox
According to the report, the average ERP is 6.4 years old with 5.3 years of life remaining. Deployment models sharpen the contrast: On-premises systems are the oldest (7.9 years) with only 3.4 years left, while cloud systems are the youngest (4.3 years) yet expected to last 6.5 years.
On-premises estates carry the heaviest technical debt, while cloud deployments deliver newer systems, stronger resilience, and longer-term value. This underscores a key finding from the report: Modernization progress isn’t uniform. Companies that have moved to the cloud are gaining longevity and resilience, while others remain weighed down by outdated environments.
But modernization is not just where systems live; it’s how they are governed. Without strategy, even the newest systems can stagnate. The research reveals several gaps:
- About 60% of organizations globally run ERP in the cloud, yet more than one third lack a defined cloud strategy—modernizing systems before modernizing governance.
- Among sleepwalkers, about two thirds review their ERP annually, but they do so without external input and often target the wrong key performance indicators (KPIs)—prioritizing technical checks over outcomes such as agility, integration, and business value.
The result? Only 41% say their ERP meets expectations. Satisfaction declines as systems age, but even newer estates underperform when governance is weak. Many teams sleepwalk through evaluations without clear KPIs or outside perspective, creating the appearance of progress without real advancement.
The evidence is consistent: Modernization succeeds where governance is strong and stalls where it isn’t.
The cost of standing still
The paradox runs deeper than technology. 81% of sleepwalker organizations plan to increase overall tech spending, yet only half expect to raise their ERP investment. It’s a clear disconnect. Companies are chasing innovation, but overlooking the very platform that powers their operations, data, and growth.
That’s the paradox in action: Chasing change everywhere except where it matters most.
The good news? Waking up from the sleepwalker state doesn’t require a total overhaul, just sharper focus and intent.
Waking up to real transformation
To move from awareness to action and build true modernization momentum, the report recommends three practical steps:
- Strengthen governance. Establish clear ownership and accountability; define integration standards and risk controls for ERP and cloud operations.
- Adopt a roadmap mindset. Define outcomes first; set a target architecture and phased plan. Fund transformation over inertia so strategy drives systems—not the other way around.
- Seek external perspective and measure relentlessly. Use independent reviews and outcome KPIs to surface blind spots, track value, and challenge assumptions.
Ultimately, it’s not the cloud that drives transformation; it’s what you do once you’re there. Without strategic direction, even the most advanced systems risk becoming digital comfort zones—modern in appearance, but asleep to possibility.
Read more in the Radar Group report, created with Infor and AWS: https://www.infor.com/resources/sleepwalker-paradox-erp-strategy