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What are the Reasons to Choose Cloud ERP over Legacy ERP?
01Oct

Is It Time to Replace Your Legacy ERP With a Modern Cloud ERP?

Is your current ERP system up-to-date with the needs of your business today and into the future? If you’ve been using a legacy ERP system for decades, it’s likely your business is compromised. Your current business management software should be more powerful and capable than the system you used a decade ago. 

Let’s take a look at why a modern, cloud-based ERP is better for your business than legacy ERP software. 

What Is a Legacy ERP System?

A legacy ERP system is driven by outdated technology which was once innovative. The purpose of legacy technology was to improve productivity and streamline day-to-day functions, but over time it has become ineffective and obsolete.

As technology rapidly advances, organizations are making the move to cloud ERP platforms. Enterprise Resource Planning software plays a vital role in transforming business operations. But if you don’t modernize your legacy ERP system, it may keep you from taking advantage of new opportunities. Legacy ERP systems not only create loopholes and affect productivity, but they also increase costs. 

Facts About Legacy ERP

  • Legacy ERP systems manage business processes from traditional computer machines and servers
  • Legacy ERP is based on proprietary programming technologies that are antiquated
  • Legacy ERP implementation and upgrades take more time than modern ERP systems
  • Managing legacy ERP systems requires many IT resources and report customizations, and it can have hardware and software issues
  • The cost of legacy ERP maintenance and support is high 
  • Legacy ERP has difficulty integrating with other systems and when it does it often leads to duplicate data or entry errors
  • A legacy system is driven by old technology with an outdated infrastructure that creates bottlenecks for business processes and operating capacity

Is Your Legacy ERP Letting You Down? If So, It’s Time for an Upgrade.

Here are some common issues you may be facing with your legacy ERP system:

  • Your software doesn’t support new technologies and the vendor takes a long time to incorporate new features into the system
  • Your system is not adequately supported by vendors 
  • Maintenance and support costs are high and response time is slow
  • You have data storage and security issues 

Legacy ERP systems slow down an organization’s ability to stand out in the growing business world. As technology continues to grow, modern and intelligent ERP software is designed to create new ways of serving customers. 

Customers’ demand has changed in the past few years. They want to track their shipments and expect on-time deliveries. They also expect a quality product so manufacturers must have measures in place to ensure their products achieve both customer and regulatory standards.

Cloud ERP is an enterprise-grade, single solution managed by powerful datacenters. It is run on the vendor’s cloud platform and automates financial and operational business functions that enable companies to meet the expectations of today’s consumers. Amid the COVID-19 pandemic, cloud ERP users had the added benefit of working from anywhere in the world and managing tasks from remote locations. 

5 Reasons Why Modernizing Your ERP Is Important 

1. Increased competitive advantage 

In a Deloitte study, it was found that 9 out of 10 respondents state that modernization techniques helped them stay competitive. It is difficult to find relevant skillsets that can manage complex legacy systems. Modern and intelligent cloud ERP systems are easy to maintain and provide the technology to advance. 

2. Better growth opportunities

Does your legacy system grow as your business scales up? Scalability is an important functionality that cloud ERP offers. If your system is not able to meet your fast-evolving business needs, it is time to switch to modern software. 

3. Security and performance

Cloud ERP supports multi-layer firewall testing to offer maximum security. Cloud ERP systems are more complete, comprehensive, integrated and thus avoid the vulnerability and risks associated with a multi-vendor landscape. 

4. Future-ready

Intelligent technologies such as AI (Artificial Intelligence), ML (Machine Learning), IoT (Internet of Things), etc. are built into SaaS-based or cloud platforms. These technologies talk with machines and sensors to feed data through the cloud for real-time status of operations. 

5. Greater insight and connectivity

While legacy ERP provides reporting and management tools, cloud ERP is designed to unlock Big Data to provide access to hidden information. It works using one database for increased speed, visibility, connectivity, and accuracy.

With cloud ERP, employees can access information and manage tasks on mobile devices, and suppliers, trading partners, third-party vendors, and customers can have real-time information access through portals designed for each stakeholder. A modern user interface (UI) helps users perform tasks more efficiently and with greater ease. 

Benefits of Switching from Legacy ERP to Cloud ERP 

Shifting from legacy ERP to modern cloud ERP can bring a wide range of benefits to your organization. From allowing employees to manage tasks remotely to tracking departmental operations and resources, modern ERP can transform the entire business. 

Let’s see why cloud ERP is better than legacy ERP. 

1. Implementation 

Implementing cloud ERP does not require hardware installation. Therefore, it takes only a few weeks to a few months to implement a cloud system, depending on the complexity of the business. Legacy ERPs are much more complex to implement, require hardware installation and a team of IT professionals to make the software go live and perform as needed.

2. Lower costs 

Cloud ERP reduces the upfront cost to the organization with one-time subscription fees. Instead of investing in multiple software programs for managing finances, warehouses, accounts, material requirements, etc., it is better to pay for a single system that provides you with connectivity and real-time data access across departments. 

A modern ERP system helps businesses lower inventory costs since it is efficiently tracked to avoid overages, waste, as well as stock-outs which can stop production. And, demand forecasting can reduce purchasing costs because it allows companies to negotiate discounts upfront and to determine which discounts will provide the biggest dividends.

3. Real-time data accessibility

In this technology-driven era, employees work from different corners of the world. Businesses own multiple warehouses, shop floors, and offices at different locations. Cloud-based ERP provides users the accessibility to track, streamline, manage, and report tasks and resources on the go in real-time, from any device. 

4. Maintenance

We have seen that legacy system providers do not maintain ERP software. Cloud ERP vendors manage all IT issues, software updates, etc. remotely, 24×7. In addition, cloud systems provide a modern user interface that today’s employees desire. 

5. Digital transformation 

Cloud ERP integrates with innovative technologies such as IoT, Machine Learning, Data Analytics, AI, and more so manufacturers can automate their day-to-day operations to stand out against the competition. Cloud technology allows organizations to scale their infrastructure to meet changing priorities and helps to address regulatory compliances to ensure quality.

Conclusion

You may wonder how long it will take to find a new ERP system to replace your legacy ERP and how long it will take to implement it. 

Well, it depends on the size and complexity of your organization, management commitment, and cooperation among the project implementation team. No two implementations can be compared. Implementing cloud ERP requires a structural strategy that is focused on the people, processes, and business operations. 

Replacing a legacy ERP system with cloud ERP will represent a great change in the entire business. If you want to explore more on replacing your legacy system with a modern cloud solution, or about the cost of ERP for small businesses, please feel free to contact our team for further guidance.