Legacy vs. Intelligent ERP systems: Which One to Adopt?
With the ongoing digital transformation, decision-makers in businesses have constantly faced a dilemma in determining which technologies to invest in and when to take a hard pass. However, a modern ERP system isnota passing digital trend.
Your business’s success depends on it. Thislegacy vs. modern ERP systemscomparison guide will clear the air for you.
Legacy ERP Systems
Thelegacy ERP systemswere originally designed to accommodate and streamline various manufacturing functionalities, including business planning, finance & accounting, product management, inventory, etc.
They were built using legacy programming and installed physically on the manufacturing site. Every time a manufacturer needed multi-site capabilities, separatelegacy ERP systemswere stationed at different sites and if additional features were required, they had to be programmed separately too. While the once-innovative technology worked fantastically for a while, it could not sustain the growing need for more functionalities.
Ultimately, that led to siloed departments and repeated downtimes. On top of it, people had to extract and analyze data manually. If your business still has alegacy ERP system, it’s likely hampering your ability to gain a competitive advantage and thrive in a volatile market.
Modern ERP Systems
Modern ERP systemsrefer to cloud-based solutions that support company-wide deployment, several integrations, scalability, personalization, and centralization. They outperform legacy ERP systems in every aspect.
According to the2020 Accenture ERP Report, about 46% of businesses are using cloud-based (private cloud) ERP solutions, while 25% are using on-site ERP systems.
Interestingly, 17% of them have deployed hybrid ERP, which is a combination of cloud-based and on-site ERP systems.
Also, it’s not just manufacturing companies that require ERP today. Though most companies with a supply chain are better off using an ERP system, almost any business can leverage it. Prominent examples include hospitality, construction, nonprofit groups, healthcare, etc.
So, are you missing out on something by not implementing amodern ERP system?
The following section will make that clear for you.
Legacy vs. Modern ERP Systems
The following table illustrates the key differences betweenlegacy vs. modern ERP systems:
Limited, costly, and time-consuming third-party integrations
Quick, cost-effective, and easier integrations with a host of third-party tools
Takes years to deploy due to on-premise installation and manual integration
Deployment may take up to six months, thanks to the pre-built design and centralized database
Does not provide real-time analytics.
Offers access to business intelligence reports and analytical dashboards
Upgrades are a long-drawn-out process that can only happen manually.
Upgrades are executed automatically (and frequently) via cloud
Supports only email communication
Enables real-time communication with clients, suppliers, and other stakeholders through separate portals
Can be installed in different departments due to a lack of centralized structure
Allows for enterprise-wide implementation
Becomes a barrier to a business’s scalability due to high cost, employee hours, manpower, and time
Necessary for an expanding business, can fit the increasing number of customers, employees, departments, and orders
Cannot be customized as per a business’s requirements without exhaustive coding
Little to no prior coding experience is required for customization
Cannot be accessed anywhere, anytime. Requires LAN and local desktops
Can be accessed through a browser at one’s convenience
Necessitates expensive and frequent maintenance
Modern ERP providers handle maintenance at their end
Requires physical monitoring for security, no security add-ons included
Modern ERP providers implement high-security protocols
Greatly hardware-dependent, which becomes obsolete quickly
Software dependent, cloud-based system
Given the many benefits ofmodern ERP systemsoverlegacy ERP systems, over62% of businessesprefer it. Moreover, 50% of companies are upgrading theirlegacy ERP systemsfor the same reasons.
Intelligent ERP systems offer you a 360-degree view of your business across all departments, i.e., operations, finance, marketing, human resources, and sales.
Instead of playing catch-up, it’s high time to be an industry frontrunner by rapidly transitioning to a modernERP system.
Thelegacy vs. modern ERP systemscomparison clearly outlines the benefits of transitioning to the latter.
The high costs, limited integrations, sluggish upgrades, outdated programming, and hardware dependency are among the many reasons why adopting a cloud-based solution is a wise move for businesses of all sizes and across all verticals.