The risks of using legacy ERP vs the benefits of using Sage X3 ERP

As markets evolve and demands change, organisations need to adapt. This includes updating Enterprise Resource Planning (ERP) systems to support these changes. If an organisation is still using legacy ERP, it may lack the necessary flexibility and quick customisation capabilities.

What is a legacy ERP system?

A legacy ERP system is an ERP system that is outdated, difficult to manage, and/or unsupported. These legacy systems can hinder efficient operations, especially if data sets and other information are not fully utilised as modern ERP systems would allow. Unfortunately, integrating these legacy systems with other critical and newer systems can be a challenge as well. This often results in isolated and incompatible data that cannot be processed efficiently. It is important to note that a system functioning independently of others may not be as effective or productive for your company.

Barriers to replacement

When it comes to the process of upgrading your outdated ERP system to a modern one, it is common for this task to be put off due to concerns over cost, resources, and the risk of project failure. Many people believe that their current system, which has been carefully developed over time to give them a competitive edge, still functions well and are hesitant to replace it, fearing that it may disrupt their key operations. Additionally, if the system has been heavily customised, the idea of not only setting up a new solution from scratch but also adapting business processes can seem overwhelming.

However, it is important to recognise that the risks associated with maintaining these legacy systems can be extremely high, as these outdated systems often fail to meet the daily demands of modern businesses, which means that you are likely using an ERP software that is limiting productivity when it should be maximising it.

Here are some key risks that come with using legacy ERP software, along with a breakdown of the benefits of using Sage X3 instead.

Risk – Lack of support and security

Having an outdated ERP system can lead to a range of issues. These include difficulties with obtaining patches, bug fixes, and security upgrades, as well as experiencing slow performance. This can result in longer downtimes, reduced productivity, and ultimately, a loss in revenue. Moreover, the security of your system may be compromised as vendors no longer provide security patches to address any vulnerabilities that may be discovered, leaving you at risk of cyber-security attacks. Additionally, if your legacy ERP solution has reached its end of life, acquiring support can become quite costly. Furthermore, relying solely on in-house support is also vulnerable to challenges such as employee turnover, retirements, and similar situations.

Benefit – Sage X3 releases and support partners

Sage X3 keeps up with the latest trends and advancements in technology through a regular schedule of new releases and patches. This ensures that it remains up-to-date and offers exceptional performance and security, while also continuously enhancing and maintaining its existing features. Whether you prefer the convenience of the cloud or the control of an on-premises solution, Sage X3 has got you covered. Additionally, you can choose from a wide network of support partners, like Inixion, to meet your specific needs.

Risk – Compliance

Legacy systems were not designed to keep up with the rapid changes in regulations of today. One crucial aspect of a modern ERP system is its ability to maintain compliance features. If your software cannot be updated with the latest regulatory initiatives due to it being out-of-support, chances are you are managing compliance through spreadsheets, which can be time-consuming and prone to errors. Failing to comply can result in significant financial penalties.

Benefit – Multi-legislation and regulation

Sage X3 is designed to support multiple languages, currencies, companies, sites, and legislations. This means that no matter where your users are located, they can access the system in their own language and have access to country-specific legislation and industry regulations. With Sage X3, compliance requirements are integrated into the system, giving decision-makers visibility into regulatory adherence and the ability to take necessary actions to remain compliant. This functionality not only reduces administrative overheads but also helps your organisation meet its obligations more effectively.

Risk – No agility

Nowadays, businesses must expect constant disruption in their industry and be agile enough to remain competitive throughout these constant changes. Agility is no longer a defining characteristic of a successful business but a basic requirement to be able to survive.

Legacy ERP is not usually very flexible. This lack of flexibility can hinder productivity and prevent organisations from adapting their processes to changing market demands.

Benefit – Scalable and customisable

Sage X3 is a flexible solution that can grow along with your business. It provides a reliable single-version-of-truth with all the necessary real-time data, while also granting you the power to swiftly adapt your business processes to any changes that may arise.

Risk – Lack of data

The data generated by your ERP solution provides valuable insights into your business, helps identify current trends, and allows you to analyse past data. However, with legacy ERP systems, extracting this information can be a time-consuming and challenging task. Users often need to interact with multiple backend systems to gather the relevant data required for analysis. This not only adds to the time taken but also makes it difficult to create a comprehensive report of relevant metrics.

Benefit – Real-time access to data

Sage X3 is built on real-time information, giving you complete visibility across your entire business. It seamlessly integrates finance, operations, manufacturing, and inventory data and processes into one user-friendly system. With real-time data available throughout your organisation, you can easily access accurate information on stock levels, purchasing, and customer orders, empowering you and your team to make well-informed decisions.

Risk – Maintenance costs

The cost of implementing any ERP solution has always been significant, but hanging onto an outdated system will only become more expensive over time. Whether it’s the risk of lost or stolen data, the need for frequent updates and maintenance with third parties, potential legal liabilities, the inability to keep pace with the market or the possibility of lost revenue due to downtime or issues, the costs will continue to mount. Additionally, as your legacy ERP system ages, the challenges of migrating to a new system will become increasingly difficult and may eventually become financially or physically impossible.

Benefit – Return on investment

With Sage X3, you can achieve a strong Return on Investment (ROI) by saving on labour costs, reducing inventory levels, streamlining purchasing processes, improving financial management, enhancing production efficiency, boosting productivity, and minimising errors.

Businesses generally decide on replacing their legacy ERP system, because they are actively searching for ways to make their operations more agile, optimised, and efficient. Sage X3 provides the perfect foundation for achieving these goals.

Risk – Poor customer service

We’re living in the ‘Age of the Customer’, and it’s more important than ever for companies to prioritise their customers to stay ahead of the competition. Customer expectations are on the rise, and your company must have a system in place that can identify these needs and meet their expectations.

Unfortunately, the data in Legacy ERP systems is all over the place, with each department having its own set of data. This fragmentation creates a disconnect between departments, making it difficult to share information. As a result, the customer service team, who are supposed to ensure customer satisfaction, may not have access to all the data they need to do their job effectively. This can lead to poor customer service, and ultimately, customers may start looking for other companies that prioritise their needs.

Benefit – Customer experience

Sage X3 ERP ensures that organisations have complete visibility across their entire business by seamlessly integrating all systems and processes. With the integration of purchasing, inventory, finance, sales, and production, among others, Sage X3 offers the opportunity for enhanced efficiency, responsiveness, and productivity. As a result, businesses can deliver exceptional customer experiences by effectively tracking customer interactions, monitoring satisfaction levels, and empowering staff to quickly respond to customer needs. This ultimately leads to an outstanding overall customer experience.

Risk – Incompatible software

New applications are being released almost daily. These apps are specifically designed to work seamlessly with the latest operating systems. Unfortunately, if you’re still using legacy ERP, you won’t be able to take advantage of these new applications or upgrade to their latest versions. This means you’ll miss out on all the exciting features and developments that can enhance your systems.

Benefit – Enhancing Sage X3 ERP

Sage X3 offers a wide range of functionalities, but every business has unique requirements that may not be covered by standard features. That’s why you can use complementary solutions that seamlessly integrate with Sage X3, allowing you to enhance its capabilities. By using Sage X3 as the single source of truth for your company, you can still easily access and analyse data from other critical business applications through integration.

Although the benefits of upgrading a legacy ERP system are fantastic, it’s important to approach the change with careful consideration. There are several tasks involved, such as selecting, implementing, testing, and training users. Planning for an ERP replacement should not be rushed, especially when there are potential business risks involved. It’s crucial to ensure that you choose a system that meets your unique requirements and will support your growth.

 

We offer a range of guides that can help you with the replacement of a legacy ERP system. Here are three that might resonate with you:

  1. For existing Sage 500/1000 users: Upgrade guide
  2. ERP business case template
  3. ERP selection checklist

If you would like to discuss your project with us, please contact our team or book a Sage X3 demo.

2024-01-30T16:40:50+00:00January 30, 2024|Blog|
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