Legacy systems provide familiarity but can become problematic for IT professionals and business leaders alike. While legacy systems have their place and purpose, the growing development of software applications, systems and platforms means manufacturers should carefully consider whether the time has come to retire those systems.
In Your definitive guide to cloud ERP, part 3: Legacy systems and operating in the shadow of cloud ERP, we take a closer look at the challenges of using legacy systems instead of the cloud for your ERP solutions.
Legacy systems are those that have outlived their functional usefulness. However, due to the costs of installing those systems, replacing them and training employees on new tools, many executives are loath to entertain the thought of change. Here are some of the downsides of legacy systems.
1. Lack of cohesion
Legacy systems often are developed, built and modified to fit specific business unit needs. Systems that are optimized for specific teams, and not the organization as a whole, are problematic and add to inefficiency and difficulty in sharing information, let alone analyzing data. By contrast, a cloud enterprise resource planning (ERP) system integrates disparate systems throughout the organization.
With disparate legacy systems, whether built within a company or inherited due to a merger or acquisition, your company likely has duplicated data about customers, products or finances that are inconsistent, redundant or inaccurate in certain iterations. With cloud ERP, your systems are integrated with easy data sharing.
3. Lack of information
Manufacturers need to operate in today’s fast-paced environment. Legacy systems are likely unable to provide the information from multiple perspectives, reported in an easy-to-read, functional format, that allows for real-time analysis and decision-making. Without the right information, those decisions are harder to make and take longer.
4. Poor flexibility
Legacy systems make change difficult to manage. Disconnected systems, unable to “talk” with each other, cause problems when business development, marketing, sales or production changes. A cloud ERP allows for seamless integration of new information, new strategy or new initiatives.
5. Degrees of difficulty
Some legacy systems are decades old, meaning that the support from manufacturers, updates and improvements may be slim to none. That means many systems are held together with bandages and tape and require a great deal of manipulation to enter or generate necessary information. Separate systems require expense to integrate, convert and report on information from multiple sources.
6. Added costs
Often a legacy system is highly dependent on specialized IT staff to repair and maintain. Legacy systems also may have had many different customizations that are extensive and lead to workarounds and frustration. The personnel costs can be significant, including station-to-station device upgrades that require lots of labor. In addition, legacy systems stored onsite require space and cooling costs to operate.
7. Limited functionality
It’s likely your legacy systems are not accessible on today’s operating systems and devices. They may not allow for access via smartphone or tablet. They do not allow your teams to take advantage of new technologies, database power and high-level analytics that can aid in work. Instead, staff will become frustrated without the needed tools.
8. Lack of content and space
Some systems that were built years ago will not have the capacity to collect, store and crunch massive data sets that modern systems, like cloud ERP platforms, can allow.
While there may be good business reasons for retaining legacy systems, the technological, financial and efficiency costs are real. At NexTec Group, we assist companies looking to migrate from legacy systems to modern cloud ERP solutions.
Our consultants work with leading companies and products like Sage X3 Cloud, Acumatica Cloud, and Microsoft Dynamics 365. Contact us to learn how NexTec can help your company improve performance and profits.