Enterprise Resource Planning (ERP) systems play a crucial role in supporting business operations and enabling growth. However, relying on outdated “legacy” ERP systems can lead to missed opportunities to improve business performance, expose your business to avoidable risks, and hinder competitiveness.
Are you facing macro-level or even day-to-day operational challenges such as tactical support resourcing that are linked to or exacerbated by current systems? If so, is now the right time for you to begin planning for the future, and if not now, when?
This article explores typical challenges of legacy ERP systems and highlights the benefits of moving to modern solutions to help you answer these questions.
What are Legacy ERP Systems?
“Legacy” ERP systems are characterized by functionality limitations, unappealing user interfaces, and constrained management insights. They are often a complex array of disparate, integrated systems, with duplication of supporting data. Software customizations and spreadsheets typically fill functional gaps, making analytics even more challenging. Despite these limitations, many companies continue to use them due to concerns about the cost and complexity of new systems, dependence on customizations, fear of leading technologies, and general resistance to change.
Continuing to use legacy systems can lead to difficulties in adapting to changing business needs, operational inefficiencies, ongoing investment in antiquated tools, and real business risks.
Business Impacts of Legacy ERP Systems
Companies using legacy ERP systems have many opportunity areas for improvement. Not taking advantage of these makes it increasingly difficult to stay competitive in our fast-paced digital world.
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- Ineffective Processes and Workflows: Outdated systems often rely on manual processes, leading to operational inefficiencies rather than integrated workflows. Leveraging the latest technologies, such as machine learning and AI, is not an option.
- Unmet Capability Needs: Legacy systems often address unique needs via customization, proliferation of systems, and offline tools. Leading solutions offer a range of industry solutions.
- Constrained Data Analytics: Without modern analytics tools, businesses lack real-time insights and predictive analytics, complicating analysis needed to inform strategic decision-making.
- Reduced Productivity: Cumbersome systems result in lower productivity and employee engagement levels.
- Talent Acquisition and Retention Challenges: Motivated business and technical employees and recruits are continuous learners who consider systems to be sources of professional skills development. Antiquated systems do not align with this mindset.
Technology Implications of Legacy ERP Systems
Legacy ERP systems can significantly impact both business and technical operational efficiency:
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- Ineffective Process Integration: Legacy systems hinder seamless integration with internal workflows, as well as external customer and supplier connectivity.
- Non-Strategic Technology Investment: Capital is spent on customizing, integrating, and maintaining outdated systems instead of investing in performance-enhancing innovations.
- Infrastructure Management Distraction: Companies miss out on outsourcing infrastructure and related processes and enhanced agility of cloud computing.
- Security Vulnerabilities: Outdated security protocols increase the risk of data breaches and cyberattacks.
What’s Different About Modern ERP Systems?
Modern ERP systems incorporate leading-edge technologies that enhance operational efficiency and business agility. Key advancements relative to legacy systems:
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- Enhanced Productivity: Robust functional capabilities and streamlined processes via workflow automation.
- AI and Machine Learning: Adaptive systems that dynamically respond to business needs.
- Flexible Platforms that Support Growth: Cloud scalability and reduced infrastructure management.
- Management Effectiveness: Predictive analytics and data-driven insights enhance strategic decision making.
- Simplified Systems Architecture: Consolidated core platform with fewer specialized “bolt-on” extensions.
- Seamless Integration: Straight forward connectivity to remaining enterprise systems.
Leading ERP platforms support evolving businesses and enable operational effectiveness. By investing in these technologies, capital is deployed towards value-added capabilities.
Are your current platforms supporting your business needs effectively?
If the observations here resonate with you, it may be time to begin charting your course for the future. To stay competitive, it’s imperative to fully understand how well your systems are supporting your business relative to modern platforms.
At Fisher Management Partners, we will work side-by-side with you as a true partner, committed to your long-term success. We can help you navigate ERP assessment, selection, and implementation processes with confidence.
Contact Ron Zesch at Fisher Management Partners (ron.zesch@fishermp.com) to initiate conversations about getting the process started.
About Ron Zesch
Through his career, Ron has led and delivered a balance of high impact business and technology focused initiatives. He brings effective planning, collaborative engagement, and management expertise to establish an environment that enables teams to thrive and deliver results.
Ron applies over 30 years of consulting and industry experience and his program / project management expertise to client priorities including: systems planning, selection, and implementation; acquisition integration and divestiture management; and strategic planning and execution. He draws on experience across a broad range of industries to tailor services for each unique organization and set of circumstances.
You can reach Ron at ron.zesch@fishermp.com.