Ditch Your Legacy ERP Software
Businesses often think they can get by on using legacy ERP software that a vendor is no longer updating or maintaining. However, as their instances degrade over time, every single business process slows down. Furthermore, outdated ERP systems have the potential to create disastrous errors in data entry and manufacturing operations. Is sticking with a legacy system really worth the risk?
As fierce proponents of the benefits of modern enterprise software, we know that when implemented smartly and utilized properly, ERP systems have the power to generate generous ROI. Over the past 20 years, we've seen hundreds of businesses go from outdated legacy ERP software to new systems that drive dynamic process changes and revitalize their operations. Some companies still running aging systems don't even know how much their legacy ERP software is damaging their processes. So, how do you know it's time to ditch that old piece of legacy ERP and upgrade your software?
The Common Tipping Point
There is a common tipping point for all of the businesses running legacy ERP. This is usually the stage at which a business reaches a critical level of handcuffing and roadblocks that prevent growth, new sales, order filling, etc. They find that they are spending more money patching up the software and putting out fires—when ERP is supposed to save them money. Because the ERP systems of years past relied on heavy customizations, the large number of customizations begin to burden IT teams, who simply cannot keep up with the rapidly evolving needs of the modern enterprise. These problems usually lead to serious executive discussions around what new capabilities are needed for the business to restart growth. The most common answer is, unsurprisingly, a new software system.
Unfortunately, the realization often occurs far too late. Too many businesses wait until their outdated ERP software systems have already crippled their operations until they seek help. They find that they are not only paying upgrade and implementation fees for the new system but also incurring costs from broken processes, lost customers and inefficient operations.
Legacy software is a common growth barricade for many businesses. What almost all businesses find when they carefully plan and implement an upgrade or re-implementation is that there are a lot of inefficiencies and processes that had been costing them hundreds of thousands of dollars each year. These are typically small costs, but they add up extremely quickly. By treating the symptoms before they develop into a full-blown sickness, you are saving you (and your business) a whole lot of pain down the road. In short, the best time to ditch that legacy ERP software is now.
The Costs vs. the ROI
Where do these hidden costs of legacy software really come from? Legacy ERP software supports outdated processes that were conceived whenever that software was implemented. As your software ages, it becomes painfully slow, accumulates bad data and bugs, and hinders future opportunities. When replaced with a newer ERP system that has been planned and implemented around strategic business objectives, organizations can save hours of time from numerous employees each week by reducing manual data entries and automating workflows.
Additionally, ditching an old ERP system can lead to greater manufacturing control and increased revenue. Businesses can leverage sophisticated data and reports to streamline supply chains, reduce waste and manufacture quality products, all in the name of delivering the best services and merchandise to customers. Although it may seem like a huge, overwhelming process, the move to modern ERP is intuitive. It's a trade-off of the time spent implementing the new system over the time wasted trying to get the old one to work. If the effort for these projects is detailed and thoughtful, the ROI that can be achieved (and even regained) will be significant.
Single Source of Truth
One of the single biggest obstacles a business running legacy ERP software will come across is the total lack of system visibility. An over-customized and aging ERP system will contain a lot of disparate functions with very little communication between each arm. The mess of customizations will eventually obstruct one of the main functions of your software: data reporting. Without transparency throughout your enterprise software and a seamless structure connecting all of the reporting functions and departments of your software, you cannot collect all of the mission-critical information your business needs about your key processes.
For example, without inventory data, you cannot plan for upcoming demand, and your sales team cannot accurately communicate with clients about expected delivery dates and manufacturing times. Newer ERP systems have been built with the value of interconnectivity in mind—they foster an environment of valuable collaboration within your business.
What's more—if you decide to move to the cloud, at least in some aspects of your enterprise system, you will immediately encourage greater accessibility between your employees and your software. Cloud software can be utilized from any device that has an internet connection. Legacy ERP software is dated and almost always unable to integrate successfully with the cloud or other web-based technologies. By moving to the cloud, you can immediately reap the inherent benefits of scalability, flexibility and cost efficiency.
Even if you stick with on-premises software for your upgrade, a newer ERP system will naturally be more amenable to integration with cloud-based applications or solutions, like your CRM or eCommerce software. Because vendors are becoming more cognizant of the importance of the cloud to enterprise systems and business processes, you will find that any upgrade you make will allow your business to make the jump into this incredibly exciting sphere of technology.
The major area that you should be concerned about when it comes to leaving legacy ERP software behind is investing in a new system that supports the old processes you were running on the previous software. In the same way that businesses can achieve significant ROI using business process modeling, you can just as easily create sunk costs by failing to properly implement or align a new software investment to your business, and using the opportunity of an ERP overhaul to re-examine and streamline operations. By making your company as efficient as possible before your implementation, you will ensure that the new ERP system can run smoothly and manage your operations and collect data exactly how you need it to.
Thousands of businesses each year implement software systems and fail to conduct proper business process modeling prior to implementation. This causes the new system to support old processes, thus supporting the same inefficiencies. Ultimately, this means businesses could be doing all the work and spending all of that investment on a costly new ERP system while achieving none of the benefits that the software promises. The difference is business process modeling. A thorough look at the way your company operates will help you clear away all the unnecessary sources of waste.
The bottom line is this: businesses of all shapes and sizes that are operating legacy ERP software will improve their operations and save quite a bit of money by conducting business process modeling and implementing or upgrading their current ERP system. Most businesses don't see this opportunity until it has already cost them a significant amount of money, and many fail to ever benefit from an eventual upgrade due to poor implementation and configuration practices. Businesses that invest time into educating themselves about ERP best practices could reap substantial ROI by ditching their outdated systems and implementing powerful new systems and processes.
Interested in proper business process modeling and successful software solutions? Datix is an Epicor Platinum Partner that specializes in CRM, ERP, eCommerce and integration solutions. No matter if you're considering an overhaul of your current system or your very first implementation, our expert consultants can help you at any stage of your software journey. Contact us today for more information about your upcoming project!