Why Your Legacy ERP System Needs Replacement

Is it time to retire your older, “legacy” enterprise software? As each year passes, support costs rise, additional upgrades and fixes become less frequent, and fewer people at the vendor know the “old” software. A legacy system has been defined by Gartner as “any system that is not sufficiently flexible to meet changing business needs”, which includes heavily customized ERP implementations.

Here are the top six reasons why it may be time to make the move to a modern ERP system.

Increases in support costs – Many of these legacy applications are poorly documented (if at all), and much of the support staff is “no longer with the company”. As fewer and fewer associates at an ERP vendor are able to support a package, the support charges are increased, so the cost to support legacy ERP applications increases as they age, much like human beings cost more to keep healthy as we age. Legacy applications are typically programmed with proprietary languages, often (now) confined to that one vendor. These support departments are frequently separate profit centers for these companies, and they will squeeze out as much support as is necessary to turn a profit. If you find yourself always dealing with the same individual, you may be in trouble.

Costly infrastructure – Most legacy applications require a legacy environment. They often run only on specific hardware which typically has very high support costs compared to modern equipment. Internally, you may have to support old operating systems or databases. It’s analogous to the increased vendor support costs.

Too customized to support – It’s entirely possible that, over time, your application has become too customized to support effectively. Many companies that commissioned heavy customization were burned. High levels of customization mean the system is not flexible enough for evolving business conditions.

Changing expectations – The operations of midsize companies in general have become more complex, as they compete in the global economy. Companies that have historically operated domestically using their own resources and their own facilities, now find themselves operating globally, where they sell to customers around the world, source products globally, and oftentimes outsource their manufacturing. Given this, midsize companies expect their ERP systems to handle these needs. Their legacy systems simply won’t handle these business processes. Their ERP system needs to be integrated globally, not just usable for back office functions like order processing, manufacturing, and financials.

Difficult to employ mobile devices – Applications which were designed for CRT’s, keyboards, matrix printers, and mice, generally have a hard time expanding to using mobile devices, which have revolutionized enterprise computing. It’s counterproductive to attempt retrofitting the legacy application to use mobile devices. It generally makes sense to implement a more modern application instead.

You should leave them before they leave you – At some point, your legacy system will no longer be supported. When you receive that notification, you do not want to be in the position of selecting and implementing an new ERP system with the “gun” of this impending event to your head. It’s much better to make the transition when you have the time to do it right.

 

Visit Enterprise Resource Consulting at http://www.EnterpriseResourceConsulting.com

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