It is a commonly accepted fact that companies typically hold on to an ERP system anywhere from 5-10 years, but there are many companies who are using software that is even older. If you’re one of them, you may be shooting yourself in the foot. ERP upgrades or ERP migrations can be time consuming and costly, but they’re worth the investment and much more affordable than the cost of doing nothing. Here are a few ways your legacy ERP may be limiting your businesses’ success and growth.
Related reading: ERP Evaluation Best Practice: Know Your Demo Options
Integration: Legacy systems are typical not built to easily connect with other important systems, especially newer products you may be considering for your business. This means constant data entry and rekeying, higher risk of human error, and decreased productivity across the organization. Further, many companies will build custom interfaces to deal with a lack of integration and that typically create even more inefficiencies and data silos. If users are putting all of their time and energy into managing clunky systems and processes, they are not focused on the tasks that drive business growth.
Global business: While global business was at one time reserved only for the largest companies, technological advancements have created a highly competitive global market accessible to businesses of all sizes. Legacy ERP systems cannot be easily deployed across locations and often lack the necessary multi-lingual, multi-currency, and other functions required for businesses who want to expand into other countries. Global business is not for everyone, but if you’re headed that direction with your business it’s going to be tough unless you make some changes to your ERP system.
Increased compliance risks: Regulatory requirements are only getting more stringent in today’s world and that simply was not the case when your legacy system was implemented. While it is possible to keep up with compliance mandates with a combination of ERP tools and outside systems, how much is it costing you and how much risk is there for mistakes that lead to noncompliance? Modern ERP systems are built with current regulations in mind and offer automation and tools to help you reduce costs and risks throughout your organization so you can focus energies and working capital on your core operations.
A lack of mobility: Mobility is a key factor in many organizations today and legacy systems typically lack the capacity to support mobile and remote employees. With an older system traveling executives do not have the ability to see what’s happening and access important data on the road, and sales people are unable to quickly pull information to answer customer questions and have to wait until they get back to the office to do so. With mobile capabilities in modern systems, executives and sales teams are armed with real-time, on-the-go access to all of the information they need such as pricing, quotes, open orders, credits, accounts receivable management information, projections, inventory, and much more.
These are only a handful of the many limitations a legacy system can put on an organization and whether all of these apply to you or not, the cost of doing nothing is far more expensive and detrimental than putting forth the time, effort, and money to implement a new system.
How well is your current system serving you? We have an ERP evaluation template that can help you decide if your current system is more of a hindrance than a help as you strive to meet your goals. Click below to get started.