Legacy ERP System? 10 Reasons to Consider a Transformation
blog/legacy-erp-systems-10-reasons-to-consider-a-transformation
2024-07-05
With the recent advancements in Generative AI, experts predict that companies not utilizing artificial intelligence in some capacity risks falling behind the competition faster than ever before.
Forbes reports that over two-thirds of companies still utilize legacy applications for operations, meaning that around 66% of businesses continue to rely on outdated software systems that poses challenges related to integration, security, and efficiency.
Emerging technology such as Generative AI can rapidly process vast amounts of data, automate complex tasks, and provide insights with unprecedented speed and accuracy, which allows businesses to make data-driven decisions, personalize customer experiences, and innovate at a pace that was previously unimaginable.
Without integration capability, accessible IT support, and emerging technology capabilities such as AI, companies risk losing out on opportunities of productivity, efficiency gains, competitive advantage, and market growth.
The transformative potential of AI, for example, is magnified by its ability to continuously learn and improve, adapting to new data and evolving market conditions in real time, which differs from past technologies that often required significant manual intervention and longer adaptation periods.
For a company's ERP system, integrating AI means enhanced efficiency, predictive analytics, and optimized operations, enabling businesses to stay agile and responsive in a highly competitive landscape.
Embracing AI or enabling teams to utilize other features and integrations in ERP systems is crucial for maintaining a competitive edge, driving growth, and ensuring long-term success in an increasingly digital world.
With Microsoft Dynamics Nav no longer being supported by Microsoft and an endless list of numerous outdated systems (that are still being used by companies), it may be a good time to look at your legacy ERP system and take on an ERP transformation that fully realizes and supports the benefits of emerging technologies, trends, and strategies.
Even if you leave AI out of the conversation, ERP’s have changed a lot in the last 4 years, and using a legacy ERP system can significantly hinder your company's growth and operational efficiency.
A Few Popular Legacy ERP Systems Include:
AS400 based software
Microsoft Dynamics Nav (outdated since January 2023)
Infor LN (Infor LN 10.2.1 and older)
SAP R/3
Oracle E-Business Suite 11i
JD Edwards World
PeopleSoft 8.8 and older
Baan IV
Microsoft Dynamics GP 2010 and older
Sage 500 ERP (formerly MAS 500)
Epicor Enterprise
Lawson M3 10.1 and older
QAD MFG/PRO eB2
SYSPRO 6.0 and older
IFS Applications 7.5 and older
NetSuite versions prior to 2009
Infor XA (MAPICS) 7.7 and older
Great Plains 9.0 and older
Why You Should be Considering an ERP Transformation: Top 10 Reasons
I. Outdated Technology
Legacy ERP systems might have served well in the past, but technology evolves rapidly. Older systems often lack modern features, integrations, and capabilities, which can hinder a company's ability to keep up with industry advancements and maintain a competitive edge. Staying current with technology is crucial for leveraging the latest innovations and tools available.
II. Limited Functionality
As businesses grow and evolve, their needs often outpace the functionalities offered by older ERP systems. They may require more advanced features, better integrations with other systems, or add-on industry-specific solutions that are not available in their current ERP. This limitation can restrict business growth and operational efficiency.
III. Scalability and Flexibility
Growing businesses need scalable and flexible ERP solutions that can adapt to changing requirements. Legacy systems often struggle to scale efficiently or accommodate new business processes, leading to operational bottlenecks and reduced flexibility in responding to market changes or expansion opportunities.
IV. User Experience
The user interface and overall user experience of older ERP systems might not be as intuitive and user-friendly as newer alternatives. This can lead to decreased productivity, increased training costs, and lower satisfaction among employees. Modern systems are designed with user experience in mind, making them easier to navigate and more efficient to use.
V. Cloud-based Solutions
Many businesses are transitioning to cloud-based ERP solutions to reduce maintenance costs, improve accessibility, and ensure data security. Cloud-based systems offer the flexibility of accessing data from anywhere, scalability to handle growth, and automatic updates to keep the software current. If transitioning to the cloud is cumbersome with a legacy system, companies may seek alternative solutions that are more cloud-friendly.
VI. Integration and Compatibility
Seamless integration with other essential tools and systems is crucial for streamlining processes across different departments. If a legacy ERP system lacks robust integration capabilities, it can create silos and inefficiencies. Modern ERP systems are designed to integrate smoothly with a wide range of applications, enhancing overall business operations.
VII. Support and Updates
As technology advances, software providers may reduce their focus on maintaining older systems, leading to fewer updates, bug fixes, and support. This lack of ongoing support can pose security risks and limit access to new features and improvements. Regular updates are essential for maintaining system security and performance.
VIII. Total Cost of Ownership
Evaluating the total cost of ownership, including licensing fees, maintenance costs, security, network support, and potential productivity losses, can reveal that newer ERP solutions offer better value for the investment. Modern systems may have higher initial costs but can provide long-term savings through improved efficiency and reduced maintenance expenses.
IX. Competitive Landscape
Industry-specific CRM or ERP solutions may emerge with features designed to address specific industry challenges, making them more attractive alternatives to older ERP systems. These specialized solutions can offer more tailored functionalities and better support for industry-specific processes, giving businesses a competitive advantage.
X. Agility and Data Access
In today's fast-paced business environment, agility and quick access to data are essential. Modern, cloud-based ERP systems enable flexibility and allow data access on demand, which is crucial for firms with remote or hybrid working models. Having critical data readily available can enhance decision-making and operational efficiency.
Read the full best practices guide here.