The Migration Trap: Why Your Next ERP Update Won't Set You Free and How to Reclaim Your Digital Sovereignty

(AI-translated content - original DE)

A frank word to mid-sized businesses: Why multi-million investments in IT often feel like a step backwards, and why the fault lies with the system, not you.

The Paradox: Why do you feel powerless despite investing millions?

Let's be honest: do you know that sinking feeling? You are sitting in the boardroom, staring at an investment proposal worth millions. It concerns the migration to SAP S/4HANA, an upgrade of Business Central, or the replacement of an ageing NAV system.

The arguments put forward by your IT Directors and consultants are logical, almost compelling: "Support is ending", "We need to move to the cloud", "We must standardise". And so, you sign. You sign in the quiet hope that this colossal effort will finally deliver what you have been promised for years: Agility. Speed. Independence.

Yet, the reality after the go-live often feels starkly different.

Instead of surging forward with newfound freedom, you find yourself in an even tighter straitjacket. Adjustments that used to take days now devour months—and consultant budgets. The knowledge of your processes no longer resides in-house, but with external service providers who sell you "standardisation" when what you desperately need is flexibility. You have bought the most modern software available, yet your entrepreneurial freedom feels more restricted than before.

At LOX Solutions, we want to make one thing crystal clear: It is not your fault. Nor is it down to any incompetence within your team.

You are the victim of a systemic error in the software industry. The "one-size-fits-all" promise—the belief that you can simply buy entrepreneurial excellence "off the shelf"—is no longer a safety net in today's economy. It is a cage.

The Identity Crisis: When standard software devours competitive advantage

Why do so many of these transformations fail or end up as money pits? Our analysis reveals a crucial strategic fallacy, which we call the "Commodity vs. Core" misconception.

Many companies attempt to buy in their unique core competence.

However, standard software is, by definition, democratised knowledge. The processes that SAP or Microsoft map out as standard are available to your competitors in exactly the same way. If you force your highly specialised, historically evolved processes—the very things that made you a market leader—into a standard template, you are not digitising your advantage. You are levelling it out.

A cautionary tale is the "eLWIS" project at Lidl. The retail giant had to write off half a billion euros to learn a painful lesson: if you try to force a highly efficient discounter process into standard retail software, you lose precisely what makes you fast. Lidl pulled the emergency brake and returned to building their own solution.

The strategic insight for you:

• Commodity: Financial accounting, payroll, compliance. You do not need to be creative here; you need to be safe. Buy standard software for this.
• Core: Your specialised manufacturing, your logistics, your unique customer service. This is your bread and butter. If you standardise this area, you surrender your soul. Here, you must build.

The Winner's Mindset: Sovereignty over Dogmatism

We have looked at what the "winners" of the digital era do differently. This is not about you becoming the next Tesla or Apple. It is about transferring the mindset of these companies to the mid-market.

These companies have understood that digital sovereignty means retaining command over value-creating processes. They do not view IT as a cost centre in the basement, but as a top management priority.

Three distinct paths have emerged that are also viable for mid-sized businesses:

1. The Courage to Build: When the software is the product

Those who take this path have realised: "My process is so unique that standard software does not support it; it hinders it."

• Example: Sixt. Why did Sixt develop its "ONE" platform in-house? Because conventional software thinks in silos: either "rental", or "leasing", or "taxi". Sixt wanted to tear down these boundaries. A car should be a rental in the morning, shared by the minute at lunchtime, and function as a taxi in the evening. No standard software on earth could map this "fluid asset logic". Had Sixt bought off the shelf, they would have had to subordinate their business model to the software. By building it themselves, IT transformed from a cost factor into the enabler of a new revenue stream.
• Example: Tesla. Many shy away from building their own software for fear of the costs. Tesla proves the opposite. When CIO Jay Vijayan realised that SAP was not agile enough for Elon Musk's vision of a seamless integration between e-commerce and the factory, he decided to build in-house ("Warp"). Crucially, he did not do this with an army of a thousand developers, but with a core team of just 25 people in four months. The lesson: a small, excellent team that understands the business is more effective than a massive budget for customising SAP.

For you, this means: Have the courage to focus on what matters. But be warned: do not cast bad processes into code. This is not about rebuilding old paper processes with PDFs. That remains inefficient. Rethink your process radically: what would be possible if technology had no limits? Only then should you build the software that enables this new, optimal process.

2. Post-Modern Symbiosis: The "Clean Core" Approach

This is often the most pragmatic route for mid-sized businesses. You accept the standard for security but encapsulate it strictly to remain agile.

• Example: BMW. The group faced a dilemma: they needed the stability of SAP for worldwide financial accounting (where nothing can be allowed to go wrong), but for optimising robots on the factory floor, SAP is too rigid. Sensor data requires millisecond decisions. The solution: BMW uses SAP as an untouchable "Clean Core" for the balance sheet. However, innovation—the optimisation of production—was outsourced to their own "Open Manufacturing Platform" in the cloud.
• Example: Apple. Apple is the most design-driven company in the world. Do you think any employee in an Apple Store works with a drab, grey SAP interface? Certainly not. Yet, in the background, SAP runs their colossal global logistics. Apple solved the problem of "ugly" and inefficient enterprise software by layering intuitive iOS apps over the SAP system. The SAP system is the stable data engine in the basement, but employees experience only the modern, fast interface. The system serves the human, not the other way around.

For you, this means: Stop bending your ERP system with individual customisations until it is incapable of being updated. Use the standard as a stable engine in the background. Build the "racing car"—your special customer portals, your IoT analytics—on a flexible platform alongside it. This keeps your core secure and your competitive edge agile.

3. Best-of-Breed: Speed through Specialists

The motto here is: "We take the absolute best tool on the market for every problem and connect them."

• Example: HelloFresh. For financial accounting, the meal-kit provider uses standard software from Oracle. After all, an invoice is an invoice. But the heart of the business—predicting the demand for perishable ingredients—is highly volatile. No standard ERP could offer these algorithms. So, HelloFresh built the supply chain software themselves but bought in the finance software. They invest their developer resources only where they influence profit.
• Example: Spotify. As a global tech group, Spotify could use the most powerful SAP system available. But they don't. They rely on NetSuite, a leaner ERP, and combine it with specialised tools. Why? Because a cumbersome "all-in-one" ERP would have slowed down the launch of new regional subsidiaries. For Spotify, "Time-to-Value"—how fast the system runs—was more important than functional depth. They wanted agility, not bureaucracy.

For you, this means: Do not invest your valuable resources in problems that others have already solved. A specialised warehouse system that fits your niche exactly, combined with a specialised CRM, is often more powerful than a gigantic ERP suite that can do a little bit of everything, but nothing properly.

Your Way Out of Dependency: From Passenger to Driver

Perhaps you are thinking: "That sounds logical, but the implementation seems enormous. We aren't a software house, after all."

That is a valid thought. However, the far greater danger today lies in misguided urgency. We call this the "HR Trap": many companies recognise the problem, panic, and hire expensive developers, but lack a clear architectural vision. The result is often that they simply rebuild the chaos of the old ERP system using modern code.

Therefore, it requires fewer "hands that type" and more "heads that structure". It requires the ability to make technological decisions through an entrepreneurial lens again, rather than an IT procurement lens.

Conclusion: It is Time for Digital Maturity

The stories of Tesla, Sixt, or HelloFresh are not tales of unlimited budgets. They are tales of courage and clarity. These companies understood that in the 21st century, technology can no longer be separated from business.

For you as a decision-maker in a mid-sized business, this is good news: You do not have to build everything yourself. But you must become the architect of your own house again, rather than just a tenant in someone else's software.

Separate what everyone has (Commodity) from what only you can do (Core). Defend your differentiation. And do not let anyone tell you that standardisation is always the safest solution. Sometimes, it is the greatest risk.

Your first step? An honest thought experiment.

Imagine you had to found your company again today on a "greenfield site". With your current knowledge, but without any technological legacy issues.

Would you buy proven standard software for your accounting and payroll? Probably, yes. Because here, you want security and efficiency.

But for your decisive competitive advantage—your specialised manufacturing, your complex logistics, or your unique service—would you buy a standard solution again and then spend years paying to have it customised? Or would you have this core process digitally mapped today exactly as is best for your business?