Recognizing the Hidden Costs of Your Legacy ERP
Software has evolved a lot in the past decade. While most consumer wouldn’t dream about using an iPhone 4 in 2020, many businesses nonetheless still use legacy ERP solutions that are as old as an iPhone 4 or much older.
That’s a problem, although many businesses don’t fully realize it.
While moving to a newer ERP solutions almost certainly brings advantages for businesses, many firms nonetheless continue using their existing legacy ERP systems out of habit, fear that upgrading to a newer system will be hard and costly, and often just because the benefits of modern, cloud-based ERP solutions are not obvious.
With that in mind, let’s take a look at some of the reasons your legacy software is holding you back. You and your organization might not even realize why sticking with your legacy backend systems is such a problem.
1. Ongoing Monitoring and Maintenance
Legacy ERP software requires maintaining on-site hardware and software. Your legacy ERP system requires IT specialists who can maintain the functionality and security of your servers, both in case of system failures and more routine maintenance such as patching and upgrading software.
If problems arise that cannot be solved by your in-house team, you may rack up consultant fees to deal with routine system updates and patches. With cloud-based ERP, your system is maintained off site, freeing up your employees to spend their time on more meaningful and strategic projects.
While the cost vs. benefit varies by firm, “Cloud-based solutions often cut the time of deployment by half due to a company having to focus primarily on its needs and not as many technical details,” notes Andy Harris
, our director of customer success. When weighing the costs of your current system, make sure you’re looking closely at the personnel and expenses associated with routine maintenance.
2.
Challenges with Remote Access
In order for your legacy ERP system to serve its purpose, your workers need to use it consistently. Otherwise, you run the risk of replicating the same siloed workflows that may have existed prior to the adoption of your ERP software.
This is even more of a concern during a year when a global pandemic and a series of natural disasters have reshaped the business world as we knew it, exponentially increasing the number of remote workers across industries. Legacy software just doesn’t handle the smartphone and remote-working trends nearly as well as solutions built natively for the cloud.
“As the economic situation continues to unfold and businesses move their focus from resiliency to recovery, those that leverage digital and cloud-based solutions will be more agile and future-proof,” says Steve White, program vice president
at consultancy, IDC.
With legacy ERP, employees often do not have full access to the necessary data from any location and any device. This centralization can create vulnerability and stifle efficiency, lowering your firm’s resiliency in response to natural disasters or other crises.
3. Cost of Building and Maintaining Custom Code
As the business world evolves, we are seeing a trend toward personalized communications
and targeted outreach, even for firms that offer exclusively B2B goods and services. If your existing system was built with a more traditional B2B model in mind, there will be a significant investment in custom coding needed for any adaptations in your business model, and those costs can add up rapidly.
Cloud-based solutions are more natively built for modern business needs, reducing the need for as much custom code. Since cloud-based ERP systems are built with flexibility in mind, there also is less need for custom code since the software more easily adapts to what your business needs without special modifications.
4. Outdated Cybersecurity
The cybersecurity threat landscape is constantly evolving as cyber-criminals play a cat and mouse game with businesses and software developers. Legacy ERP just doesn’t stand a chance in this environment, because legacy solutions must be updated by each business, and these patches and upgrades can be tricky.
On the other hand, modern, cloud-based ERP is maintained on an ongoing basis by developers. This means that new vulnerabilities can be patched faster, and core software adjustments and methodologies can more easily evolve with the threat landscape.
For individual businesses, this cybersecurity function also is largely outsourced to the developer hosting the cloud solution—meaning faster updates and without the hassle of staying on top of cybersecurity issues. One of the biggest selling points for modern cloud solutions is better ongoing security.
The costs of potential data loss or cybersecurity breaches can add up quickly. While you may save in short term costs by not upgrading your legacy ERP, the risks of doing nothing are considerable.
5. Lack of Real-Time Reporting
Outdated systems also can impact the quality and accessibility of your real-time reporting. Lack of automation and accessibility of information on production, POS data, inventory and work hours will negatively impact your productivity and undercut opportunities for growth. Legacy systems keep track of much of this data, but often the visibility comes in the form of reports instead of real-time updates. This is huge from an operations standpoint, but easy to miss.
With more remote workers than ever before, your legacy ERP system may be hurting your ability to collect and analyze data, too. You could be missing out on the flexibility of cloud-based solutions such as Business One
and Business ByDesign
which are easily customizable for SMEs with a fraction of the startup costs for a legacy system.
In an ever-evolving world of business and technology, it’s time to make sure your ERP software is serving you, not the other way around.
Luckily for SMEs that find the prospect daunting, hybrid solutions are also an option. If you’re interested in exploring the options for your firm, SAP-certified partner such as Navigator
can help you identify the best solution for your business, whether that’s upgrading now or in stages.
For more both on the benefits of upgrading your ERP system, and what it will take to modernize, talk with one of our consultants at (801) 642-0123 or by emailing info@nbs-us.com
