Acumatica 11-Nov-2021

4 Risks of Staying on Legacy ERP in 2022

risks legacy ERP

Companies are continually seeking to make their operations seamless by adopting the latest technology in their operations. The dynamic nature of technology calls for organizations to be always ready to change whenever a new and better technology gets into the market to reap the benefits associated with it. Failure to change to the new technology risks the business becoming uncompetitive and eventually being less productive.

Replacing legacy ERP is not a trivial matter, but the reality today is that migrating from legacy ERP to new, cloud-based ERP like Acumatica is a lot easier than updating an existing ERP solution on-premises. At Cloud 9 ERP Solutions, we know the ERP journey and have helped companies just like yours to navigate it with ease. 

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If you’ve done a good job with your existing, on-premises ERP, it’s probably serving your business needs fairly well—at least for now. Continuing with it, however, presents a number of potential problems in the near future, if not already. Here are four of the most serious:

1) Missed opportunity for growth

While Legacy ERP has been effective since its inception and your company has enjoyed the benefits that it presents, it is time that you consider moving to more advanced ERP systems in 2022. Although your current system may appear to be working normally, there are some opportunities that you are likely to lose if you continue with the old system. It is, therefore, time that you consider making the change to reap the opportunities that are associated with the new ERP system.

Companies that stand good chances of growth are those that adapt, scale, automate, and respond to the changes in the operating environment. These qualities are present in the new ERP software making them very agile but are not available in Legacy ERP. The lack of agility in Legacy ERP will make your company less competitive and the company will lose its edge in the long term. The most recent technologies that many companies are considering adopting are 3D printing and the Internet of Things. These modern technologies are only available if you choose to use modern ERP software. Without adopting the new ERP software, your company will be facing a bleak future as it will have to cope with the limitations of Legacy ERP.

2) High System Maintenance Costs

The Legacy ERP system is more expensive to maintain and operate as compared with the recent technology. As a result, your company will be incurring huge expenses just to have the system running. The major reason why the Legacy ERP system is costly to maintain is since it uses a stack of software for its different subsystems. The more subsystems your company have, the higher the maintenance costs.

The amount saved by shifting in the new ERP system can be used to support new initiatives and innovation. According to computer economics, companies that use the Legacy ERP system spend 80% of their IT budget on maintenance as compared to 69% for those that have shifted to the modern ERP software. Your company will improve on its productivity as a result of these significant savings.

Learn more in 8 Ways an ERP Upgrade Before the End of the Year Can Save You Money

3) Poor Focus on Customers

The approach that most companies have been taking in recent times is focusing more on their customers. The ability of a company to offer the best services and products to the customers makes it more competitive compared with those that are not keen on meeting the expectations of the customers. The customer expectations have been increasing and your company needs to have a system that can identify these needs. It is only after the needs have been identified that a solution can be developed.

Legacy ERP systems do not have the capacity and infrastructure to support customer-focused manufacturing. The basis of offering customer-centered services is having a system that can collect, share and act on the customer data. Legacy ERP systems lack these capabilities and it will, therefore, not help your company to offer customer-centered services.

The data in Legacy ERP systems is fragmented with each department having its own set of data. Such fragmented data creates a disconnection between the various departments as it is difficult for the information to be shared. As a result, the customer service team that is supposed to promote customer satisfaction may not have all the data that they may require to deliver on their duties. The effect is poor customer service which can make them move to other companies which are customer-centered.

4) Failing to Adapt to Industry Needs

The manufacturing environment has been changing over time due to modern production demands. Companies that are stuck to Legacy ERP system are gradually realizing that it cannot handle modern manufacturing requirements. There is a big gap between what is needed and what can be delivered by the Legacy ERP system. As such, there are many bottlenecks in the use of the old system that makes it impossible for companies to upgrade their manufacturing to 21st century standards.

To modernize manufacturing, your company will require an ERP system that is fast and flexible. These important features are lacking in the Legacy ERP system hence the need for its immediate replacement. The old system is also not compatible with modern employees who prefer using smartphones and tablets. The old system is not designed to support the mobile workforce and companies that do not adopt the new system may struggle to find employees in the future.

Don't Wait Another Year For Your ERP Upgrade

Don’t wait another year! If your current ERP systems is not meeting your needs, Q4 is the last chance to make the switch and set your business up for success in the new year. How do you know if it’s time?

- Your ERP does not support the needs of the business (lacks functionality, is hard to use, response time is too slow)
- Operating costs are too high
- You rely on spreadsheets to get things done
- Executives get little useful insight from the system (lack of dashboards, self-service BI, or they are difficult to use)

Click here to schedule a free evaluation of your business and operations or to learn more. We’d like to get you on the right Cloud ERP path with Acumatica!

Still not sure? Browse the links below to see if it is time for your company to make the switch: 

- 5 Risks of Staying on Legacy ERP Software
- Charting Your Course to Smarter Business Management Software
- Top Considerations When Thinking About an ERP Switch
- How to Find the Right ERP Implementation Partner
- Watch our Acumatica Overview Video

 

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