What is a Legacy System?
Gartner now defines a legacy system as 'Any system that is not sufficiently flexible to meet changing business needs.' and according to Gartner, by 2016, 'ERP implementations that are heavily customised will be referred to as 'legacy ERP''.
Changing Business Needs
With the wide-ranging changes in technology in recent years, the capabilities required by businesses from an ERP system, and what is available in the marketplace, have changed immensely. Equally, the changing pace of business, and the immediate requirement for information by businesses and customers alike, places demands on business which many ERP applications find it increasingly difficult to satisfy.
Over the last number of years, there has been a trend to implement a standard ERP system and to add an increasing number of customisations, enhancements and modifications to cater for additional needs. These vastly customised 'legacy' ERP systems have lead to a range of problems for companies in today's fast-paced business world.
5 Key Problems with using a Legacy ERP System
Key problems with using a legacy ERP system include:
1. Lack of Flexibility
One of the key issues with a legacy system is that it does not provide companies with the flexibility required to carry out the day-to-day tasks and to customise and change elements of how the system currently works where business needs change.
2. Lack of Information
Legacy systems often lack the required reporting capabilities and adequate access to information held within the system. Businesses today require up-to-date information in real-time in order to maintain competitiveness and response to business issues. Lack of information prohibits the ability to react and solve problems in a timely manner.
3. Lack of IT Resources and Dependency on Individuals
Legacy systems often require specific IT skills, mostly in older or obsolete programming languages. Typically, many legacy solutions incorporate extensive and unique customisation. Often the employees who have managed these customisations are the only people who understand the complexity of the system at any great depth.
Companies must plan for employee attrition but sourcing new staff to replace in-house knowledge and skills in supporting the legacy applications becomes increasingly difficult.
4. Costly to Support & Maintain
Legacy ERP systems are often costly to both support and maintain on a day-to-day basis. The more customisations added to the system, the more complex the system becomes, making it difficult to add any additional changes at a later stage to cater for newer needs and business requirements.
5. High Complexity
The level of complexity of many ERP systems makes it difficult for staff to fully understand them, leading to the system being either under-used or used incorrectly by the business.
Not only that, any required changes to the system may be highly complicated, demanding thorough investigation to avoid negative impact on other parts of the system.
Does your ERP system fall under the Gartner definition of a 'legacy' system with a 'lack of flexibility to meet changing business needs'? Is your company facing the above problems? If so, it may be time to consider an ERP system review and to begin the search for a new system.