Is your current ERP system supporting the growth and technical needs of your business? Over the last decade, tech has advanced, and legacy ERP systems are becoming increasingly obsolete. However, many businesses are still trying to make their old systems work.
In fact, half of ERP customers are at least two versions behind the latest release. Two versions can equate to a system that is four years out-of-date! In modern times, four years is enough to set your company back behind your competition. How? Here are eight reasons:
- Drains Innovation from IT Budget
Old ERP systems can require constant maintenance which eats up your IT budget. Gartner found in their research that maintenance was consuming 50-90% of the average IT budget. That doesn’t leave much room for investing in growth and improvement. However, by upgrading to a new, innovative solution like cloud-based ERP, you can realign your budget with innovation and reduce the ongoing maintenance needs. Then you can invest in areas like cross-functional workflows, entry into new markets, and improved connectedness between systems.
- They Fail to Keep Up with Changing Business Regulations
With on-premise ERP, it is simply not possible to keep up with changing business regulations. Whether it’s corporate and sales tax changes or new strict requirements by accounting bodies, changes put pressure on financial organizations. You may find ways to manually fill the gap and make ends meet, but it is a constant game of catch up. On the other hand, consider the alternative, a fluid cloud environment which automatically updates to be current with all regulations and standards. It streamlines the process, making your business more efficient and effective. This lowers your risk and saves you time.
- Holds Back Scaling Potential
In 2017, businesses can go global much faster than they could even four years ago. You have the ability to reach millions of potential customers in just a year or two. With an outdated system, it could take at least a decade to have that rate of progress. You would need to grow gradually, deploying ERP databases and instances for each market, while hiring IT, investing in offices, and more. All of this holds business growth back compared to cloud ERP applications that cut the scaling time down from years to weeks.
- Not Suitable for the Mobile Workforce
The millennial generation is demanding easy-to-use systems that are user-friendly and mobile. They want to access work information whenever and wherever they are. Legacy systems were never designed for that kind of functioning. They were built for only PC’s, and any attempt to create mobile access is going to be patchwork compared to new ERP applications made for mobile computing. Companies who upgrade will reap the ability for increased productivity and more real-time communication.
- Hampers Increasingly Decentralized Business
Similar to the growth in mobile workers wanting to work from anywhere, businesses are desiring to take advantage of globalization. They are analyzing the most strategic locations to work from and setting up shop. However, this often isn’t possible with a bulky ERP system that requires heavy weight software and hefty Windows clients. What is possible is setting up cloud computing that enables your workforce to access needed apps from anywhere. You can easily scale up or down, free from the constraints of centralized ERP. This creates a huge advantage to businesses who can now distribute their businesses to best suit their needs without constraint.
- Fails on Delivering Real-Time Information
Often, legacy ERP systems are inefficient when it comes to reporting. Companies spend weeks measuring core financial reporting, which limits the information that is available and hinders the ability to make strategic decisions. When reports are finally are compiled, they are already out of date. If your business is operating like this, it won’t ever be able to compete with modern ERP systems that offer real-time reports personalized with KPI’s for every employee, visibility across the business, and the ability to create reports with self-service tools. Real-time data will empower better and more timely decisions.
- Isolates Your Business from Channels, Suppliers, and Customers
Legacy ERP systems aren’t compatible with the newly interconnected world. This can be frustrating for you, your customers, and your suppliers. Where the old ERP systems are silos, disconnected from the rest of the web, cloud ERP apps are made to connect with web apps and platforms from internal and external sources. As a result, businesses can create a synchronized front and back office where customers see their orders in real time, suppliers can fulfill customer orders, and all your info stays up to date. Improved efficiency, accuracy, and convenience will win every time!
- Barrier Between Self-Service and Employees
Lastly, old ERP systems were created for businesses that are top-heavy in administration, where positions were dedicated to time entry or expense reporting. Now, with the growth and efficiency of self-service showing to be a profitable strategy, ERP’s can be limiting by not allowing this functionality. New systems will remove the barrier by allowing employees to enter their own time, expenses, etc., while managers can also do more without IT involvement. The result is an empowered workforce and a decrease in costs for the company.
As you can see, legacy ERP systems just aren’t providing the best value anymore. Too much has changed, and it just doesn’t make sense to keep trying to fit a square block into a circular hole. It will cost you time, money, and can potentially give your competition a leg up on you.
Instead, transitioning into a Cloud ERP can free your business from the inflexible, change-resistant and brittle ERP of years past. Your business will gain the freedom, scalability support, accessibility, and efficiency you need to thrive in modern times. Contact us today to learn more!