Cloud-based ERP

A Clear Winner in Comparison against Legacy ERP

By : OnCloudERP Team | Posted : June-14-2019

The term legacy ERP in the ERP world too is quite similar. This older version of enterprise software was earlier considered the cornerstone of enterprise-critical technological solutions, but in the current business landscape, it’s legacy status indicates the stagnant nature of the technology, with minimal scope for scaling up to match the ever-changing business demands. With the advent of intense innovation in ERP, in terms of cloud-based solutions, AI, and smart data management, ERP has undergone a complete makeover, delivering data-driven, intelligent, and cloud-based SaaS solutions that fit into every business pocket and deliver extensive flexibility in terms of delivering enterprise-specific solutions with exponential scalability.

In stark contrast, legacy ERP systems typically have siloed business processes and functionalities that rarely communicate with each other. The “legacy players” constantly wrote application codes that created band-aid solutions to meet the changing needs of existing customers. The result was a huge gap in terms of meeting the re-platforming or cross-platforming requirements of modern technology. Many legacy ERP software applications that are available today thus lack up-to-date functionality and reporting capabilities. This lack of scalability and performance pales in comparison with the new generation, cloud-based ERP, which supports security, portability, interoperability, and performance speed.

From the cumbersome legacy ERP to the efficient modern ERP

Some of the most famous legacy ERP systems available today are MAPICS (the so-called granddad of ERPs), Baan, BPCS, Growthpower, MANMAN, MK, Pansophic, Microsoft, SAP, and JD Edwards. Typically, these legacy systems were customer specific and required onsite implementation that spanned from 6 months to more than 2 years incurring a heavy cost. Of course, many of these legacy players flourished through high-cost implementation, code maintenance, and endless upgrades.

The post-2010 era brought in exponential changes in enterprise business applications, with cloud and other innovative technologies streamlining the flow of information, enabling smart scaling up, and strengthening data security. All major ERP leaders with legacy applications attempted to transition into the cloud platform; however, the cost of this paradigm shift was huge. But the new-generation ERP players had an early-mover advantage since they were able to easily adopt cloud-based and disruptive technologies into their ERP framework thus delivering operational excellence and effortless implementation of solutions. This gain in speed was a shot in the arm for the cloud-based players in the ERP world.

Advantages delivered by cloud-based ERP

Cloud-based ERP is the most convenient approach to incorporate enterprise business applications into your business ecosystem. With options such as pay-as-per-use models, you can plan business expansion with confidence, without having to worry about buying licenses as capital expenditure, plan elaborate expansion support, or deliberate about data security.

Cloud-based ERP delivers many incredible benefits:

1. The application can be configured in a short time.

2. There is no recurring maintenance fee or annuity payments.

3. No additional hardware costs, or other infrastructure requirements.

4. Scalability and integrations are provided by default.

5. All new releases/upgrades are provided as part of the package in cloud-based ERP.

6. The ease of use and the ability to perform proof of concept are added benefits.

7. Built-in and tested best practices can also be easily incorporated.

A quick comparison between legacy and cloud ERP

Legacy Solution Cloud-Based Solution
Long duration for implementation Rapid Time to Value
Expensive customization Easy and affordable customization
Heavily dependent on IT resources Minimal IT resource involvement
Separate MDM framework Integrated MDM support
Expensive and cumbersome upgrades Easy and affordable upgrades
Long time to release new versions Frequent new feature releases
Added hardware costs No additional hardware costs
Large upfront investment Subscription-format of billing

Transitioning from the legacy era to the cloud era

Legacy ERP systems were clearly intended for a business ecosystem that was slow in transition and heavy in maintenance. In today’s change-intensive landscape, businesses can no longer risk losing time, risking data duplication, or staying behind in the competitive market. The need to stay ahead of others in innovation, time to market, accuracy, productivity, and customer service at a reasonable cost has become critical. All these expectations can be met only with a light-investment on cloud ERP that comes armed with AI, business intelligence, data management capabilities, security and compliance, and multi-device capabilities.

The wish list is much longer when it comes to ERP needs and hopes that the enterprise has. But for all the current players of the business landscape, the modern-day cloud-based ERP is definitely a much safer bet that the good old legacy counterpart.