Teko Mojaki | Managing Director | Spinnaker Support South Africa | mail me |
Enterprise software used to be a decision within the IT lifecycle. However, it is no longer just that. Core platforms such as ERP systems, databases and virtualisation have become embedded in how organisations recognise revenue, control costs and satisfy regulators.
These platforms are not back-office systems. They are financial infrastructure. Increasingly, they are dictating capital allocation in ways many CFOs did not sign up for. However, the shift is easy to miss. Annual maintenance, which typically represents 18% to 22% of licence value, still appears to be a predictable operating expense. In reality, it has become a trigger for much larger and less predictable capital decisions.
Forces reshaping software decisions
Lifecycle deadlines are becoming more rigid. As a result, organisations must choose between upgrades and extended support. What we are seeing is that licensing models are shifting towards subscriptions.
These subscriptions increase long-term costs and reduce flexibility. At the same time, support entitlements are changing without a corresponding increase in value. The consequence is straightforward. Vendor timelines are dictating decisions that should align with business priorities.
This is not simply a technology issue. Instead, it represents a loss of financial control. This reality highlights the shift from upgrades to control.
The hidden cost of forced upgrades
When upgrades are forced, the real cost is not the programme itself. Instead, organisations displace other priorities. Capital moves away from growth, automation and customer investment. Execution risk also increases because organisations rush large programmes and divert critical skills into compliance work.
In South Africa, currency exposure amplifies the impact because dollar-based costs compete against rand-based revenue. This creates the hidden tax of timing pressure. It rarely appears in business cases. However, organisations experience it through missed opportunities and operational strain.
Recently, we officially launched in South Africa after operating indirectly for several years. Demand has been strong. CFOs are beginning to respond because the question is no longer whether to modernise. It is about understanding who controls the timing.
In any other capital-intensive environment, organisations value having options. The ability to defer, sequence or redirect investment reduces risk and improves returns. I believe that enterprise software now follows the same logic. This reflects the shift from upgrades to control, where organisations regain flexibility over investment decisions.
Why alternative support models are gaining traction
This is why alternative support models are gaining traction globally. Their appeal is not technical. It is economic. Organisations can maintain stable systems, remove immediate upgrade pressure and decide when transformation genuinely makes sense.
Organisations are not avoiding modernisation. Instead, they are refusing to modernise according to someone else’s timetable.
The most effective organisations are not adopting an all-or-nothing strategy. Instead, they segment their technology estates. Systems requiring continuous regulatory updates remain on vendor support. Meanwhile, organisations manage stable, low-change environments differently because they consume little new value.
Technology governance becomes a board responsibility
Think of this approach as portfolio management applied to technology. However, it carries a higher governance requirement.
Frameworks such as King IV make it clear that boards are responsible for technology and information governance. Likewise, POPIA establishes clear obligations around data access, security and third-party management. Consequently, software support decisions are no longer procurement exercises. They have become governance decisions with financial, operational and regulatory consequences.
For CFOs, four questions matter:
- What are we actually paying for? Many organisations fund entitlements they never use.
- Where are we exposed to forced timing decisions? These represent the real balance-sheet risks.
- What options do we have? Without credible alternatives, organisations lose their negotiating position.
- Most importantly, if capital is released, where will it go?
Cost reduction is not the primary objective. Instead, organisations should focus on reallocating capital. The organisations that succeed are not those that spend less on legacy systems. They are the ones that convert that spending into measurable outcomes such as automation, better data, improved customer experience and stronger resilience. That is where value is created.
A strategic financial decision
The broader implication is unavoidable. Enterprise software has moved to the centre of financial strategy. It now shapes capital deployment, risk management and organisational responsiveness. As a result, the shift from upgrades to control has become a boardroom priority rather than an IT discussion.
The real question for CFOs is no longer whether to upgrade. Instead, they must decide whether upgrades happen on the vendor’s terms or on the business’s own terms.
