Your legacy ERP software might be costing you more than you realize. Here’s what you need to know.
Legacy software refers to technology that still functions but is no longer as modern or effective as it used to be. However, many organizations still use outdated legacy ERP software without fully realizing its impact on their business. They might view the implementation of new software as expensive and time-consuming or are simply comfortable using the system they’ve always had. Still, the truth of the matter is that maintaining an outdated legacy system costs your business more in the long run. This article will examine the costs of maintaining legacy software and its associated challenges.
The Main Costs of Maintaining Your Legacy ERP System
If you’re currently using legacy software in your organization, here are some costs associated with maintaining and supporting your outdated system.
💰 Cost 1: Ongoing System Monitoring & Maintenance
Your legacy ERP software likely needs constant attention and resources in order to prevent a system failure. As they are more prone to failure than modern ERP solutions, you’ll spend more time and energy to upkeep your system. According to one study, firms using legacy ERP systems spend between 60% and 80% of their IT budget on maintenance compared to those who have shifted to modern ERP software.
💰 Cost 2: Maintaining and Troubleshooting Custom Code
You will likely rely on custom code to add new functionality to your legacy system and keep up with your changing business needs. As you continue to add new resources and code to update an outdated system, it’s no surprise that you’ll encounter glitches and bugs that will time and money to fix.
💰 Cost 3: Tech Support
Those who use older systems need skilled professionals who can effectively monitor and support them. This means that you either must spend a lot of time and energy in training technical support experts for the better use of your system or recruit special people with experience in legacy systems. This can get costly, especially when your legacy system becomes obsolete and finding professionals who know how to work with it becomes harder.
💰 Cost 4: Exclusive Licensing
The need for special licensing can also run up your costs. If your legacy system is extremely outdated, there’s always the risk that the vendor might just discontinue it. This means that the licensing might be more difficult to procure, and special fees might be associated with continuing to use that system.
The Challenges & Hidden Costs of Using Your Legacy ERP Software
So, you’re now aware of the surface costs of maintaining an ERP legacy system. However, numerous challenges or hidden costs are associated with an outdated system, which appears in several business areas, including staff experience, customer experience, data security, performance, and productivity, to name a few. Here are the top ones to know about.
❌ Loss of Business Opportunities
Maintaining a legacy system will limit your ability to benefit from emerging technologies like AI, machine learning, and IoT that new cloud ERP solutions can offer. New software also focuses on better integration and automation. You risk missing business opportunities and losing your competitive edge by staying on outdated systems. While your competitors can offer a better customer experience by using the latest tech solutions, you may face long-term costs as a result of providing unreliable services by clinging to legacy systems.
❌ Frequent Downtimes
Legacy software is more prone to glitches and system crashes than updated or modern cloud-based systems. This increases the likelihood that you will frequently experience downtime. What does this mean for your business? Frequent periods of downtime can result in monetary losses, poor brand experience, and employee frustration.
❌ Inhibited Business Stability and Growth
With your business's expansion and growth, there is an increasing need to have scalable software in place. This can be a big issue as legacy systems inhibit business development and scalability. If your existing system provides no support for increased production capacity, you’ll forcibly adapt your processes to your legacy software, impeding the growth of your business as a result. Due to increasing demand and scale, you will need improved throughput capacity and a new IT architecture to handle your operations.
❌ Lack of Mobility
Legacy systems do not allow mobile or remote access, which can be a serious detriment to your organization and employees. If employees are unable to access systems and business data safely when they’re on the go or out of the office, this could lead to loss of productivity as well as increase the risk of creating silos – which is detrimental to performance and efficiency.
❌ Outdated Security
Cybercrimes and security threats are always evolving, and older systems are often more vulnerable. A business running on a legacy ERP system is not as secure, because they require constant security updates and maintenance checks. Also, if you are using an ERP system that has reached end-of-life, your system no longer receives updates or security patches.
Is It Time to Upgrade to Cloud ERP?
In most cases, legacy ERP software leads to overheads and hidden costs that may damage a company’s long-term growth and success – especially in the case of data loss or software malfunction. By upgrading to a modern cloud ERP solution, you’ll instantly reduce your total cost of ownership, reduce operating costs, and give yourself a competitive boost as you take advantage of the many benefits of cloud ERP – which include improved security, real-time analytics, scalability, and better productivity and efficiency across the board.
Book a free consultation with the Kwixand Solutions team to discover how a cloud ERP solution can transform your business and help you achieve your goals.
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