why the database need to be upgraded

Oracle Database Upgrade
The database administrators need to improve the database based on the business criteria, to upgrade the newer version for performance improvement.
Database upgrade depends upon business requirement, It’s one of the Database Administrators role to develop a highly forceful database to match that business requirements.
If any of these below challenges exist in an IT environment, it is time to upgrade the databases to the latest RDBMS version.

The applications are dissimilar with different performance and data requirements
The business user base has increased to a large extent
Application provider is pushing for database upgrade.
The database vendor has withdrawn support for the current version
The data is growing exponentially
One of the key elements of the Upgrade program is to determine the most proper upgrade strategy for database instances. Customers usually perform in-place upgrades when there is no change in the underlying hardware. Some customers perform a platform migration in conjunction with the Oracle upgrade.
The Database moving from lower version to higher version is known as Upgrade. If the database moving from higher version to lower version is known as downgrade
Before starting the process we must pre-check the database for upgrade and also need to take whole database backup
Pre upgrade checks:

database version
database size
server options
initialization parameter(deprecated/obsolete)
set the new version bash profile
upgrade the database
Test the database
Tune the database