In recent years, the biggest players in ERP, including SAP, Oracle and Infor announced the end of ongoing support for their traditional ERP solutions, gently nudging clients towards new Cloud ERP. For many, it still wasn’t enough for companies to take the leap until… Covid-19.
A true catalyst for digital transformation, the pandemic left no operation unturned, requiring overnight integrations, upgrades, and investments into remote ways of working. Given the nature of legacy ERP systems, we believe companies avoiding the inevitable leap to ERP digital transformation, can only result in failure. But why? Let’s break it down.
Legacy ERP challenges and limitations
Legacy ERP challenges in today’s modern landscape have growing and damaging limitations to businesses and their end-users.
- Accessibility: remote access to a legacy ERP system is notoriously difficult, and often requires a VPN that can severely impact speed and usability for end-users.
- Rigid system: Legacy ERPs are built with rigid processes and segmented responsibilities that get in the way of flexibility. This results in tightly secured databases that make it difficult to make sense of reports.
- Integration: Traditional ERP systems rarely support modern software integrations. When they do, most function on a standardized level, unable to meet the unique requirements of a company.
- Costly adjustments: Scaling and upgrading a legacy ERP system is exceedingly difficult, expensive, and impractical, severely impacting the sustainable growth of an organization.
A legacy ERP is simply incompatible with remote capabilities and a menace to efficiency. So why train new users on a tool that’s fast becoming obsolete? To be a workplace of the future is the ability to activate users anywhere, especially in times of crisis.
1. Costly and complex onboarding
Legacy ERP onboarding can take months to comprehend heavy functionalities thanks to unfriendly UX, and will only lead to higher training costs. The evolving behaviors and expectations of ‘digital natives’ will either foster frustration or, worse, lead to the incorrect use of the ERP.
2. Internal IT maintenance
An old ERP is a lot like an old car – in frequent need of maintenance. Since in-house ERPs are installed and deployed on a company’s own servers, it means members of your IT department are responsible for support, upgrades, and maintenance. But to do so, they require specialized IT training, taking precious time and attention from their existing tasks. In cases of emergency, it would also require external help to replace them.
3. High costs and slow speeds
This means additional costs any time you upgrade and additional servers each time you scale, severely impacting your bottom line. Older ERPs have also experienced a huge amount of customization, adding to complexity and slower deployment speeds.
4. Safety and security of data
More worrying still, is the fact in-house ERPs are no longer compatible with modern day security demands, which were only exacerbated due to remote working in the pandemic.
5. Incompatibility with modern technology
Many legacy ERPs are also incompatible with emerging technologies, including SaaS integrations and mobile solutions. The list really does go on…
The growing benefits of Cloud ERP
If legacy ERP challenges aren’t enough to sway you, let’s move onto the benefits of Cloud ERP.
1. Freedom for your IT department
The first and most obvious benefit of Cloud ERP is relinquishing the responsibility of maintenance from your IT team. Whichever Cloud provider you select, will host the entirety of your data with a much higher degree of safety and security. A Cloud ERP also means scaling your ERP modules with ease, with no disruption to your business operations.
2. SaaS subscription model
The nature of SaaS (software as a service) ERP means your company can choose a pay-as-you-go or subscription model. It comes at a much lower cost, that’s both in line with business needs and your budget restrictions. The vendor also entirely manages SaaS, meaning you’ll receive rapid customization, automatic upgrades and regular updates.
In a study, nearly 90% of companies that selected a cloud based ERP system, opted for a SaaS model over a hosted model.(Source: Panorama, The ERP Report 2020)
3. Remote working
Digital transformation, most notably Cloud solutions, cater to the new way end-users work – anywhere they need to. One of the biggest benefits of Cloud ERP is the ability for your employees to work anywhere with complete and secure access to company data, across their numerous devices (laptop, tablet, and smartphone).
4. Round the clock support
One of the greatest benefits of a Cloud ERP package is consistent round the clock support from your provider. This means support and security whenever your vendors require it. So the real question is, are you ready to safeguard your business, operate with resilience, and be flexible in the face of disruption? Because you can’t solve tomorrow’s problems with yesterday’s solutions.
|Cons of Legacy ERP||Pros of Cloud ERP|
|Legacy ERP onboarding can take months to grasp heavy functionalities||Scaling your ERP modules with ease, with no disruption to your business operations|
|Your IT department are responsible for maintenance, support, upgrades||Immediate customization, automatic upgrades and regular updates|
|Additional costs any time you upgrade and additional servers each time you scale||Access complete company data from any geographical location|
|In-house ERPs are no longer compatible with modern day security demands||Consistent, round the clock support and security from your provider|
|Many legacy ERPs are incompatible with emerging technologies (e.g., SaaS integrations)||Complete and secure access to company data, across their numerous devices (laptop, tablet, and smartphone)|
The challenges of Cloud ERP adoption
But with new systems come new challenges. We’ve covered an extensive list of issues regarding legacy ERPs, and the pros of Cloud ERP. Now it’s time to address your end-user challenges.
The main challenges facing ERP leaders and project managers:
- User onboarding and training
- User satisfaction
- User knowledge of a tool’s added value
- User adoption
These challenges are relevant to any software implementation and should be at the heart of your change management project. An ERP system is often called “the central nervous system of an enterprise” because it manages numerous business functions, while allowing the flow of transactional data to be shared between them. It’s essentially the eyes and ears of the entire organization, making digital adoption a vital part of its success.
Ready to explore cloud ERP migration? Take a look at our 5 tips for Cloud ERP implementation.