Are Legacy Systems Costing Businesses A Fortune?

Posted by Neil Davidson on November 26, 2013

Legacy systems are relatively costly to maintain in comparison to new, or up-to-date streamlined ERP (Enterprise Resource Planning) programs. This is because legacy systems are more time consuming and financially taxing as productivity is lost due to constant maintenance requirements, time spent fixing the system and time lost due to inefficiencies. As the IDC report on ‘Tackling the CFO innovation challenge’ outlines, data needs to be accurate and easily accessible in order to make the best decisions. However, legacy systems can make this impossible because they often create siloes of hard-to-find information that isn’t available in real-time unlike a modern updated program.

Another problem with traditional systems is that they are often inflexible, which means that the business will start to suffer as it evolves and leaves the technology behind. Objectives that existed when the system was first introduced will be replaced as the organisation grows, which is why a modern ERP solution that can adapt and maintain the same level of support is so valuable. For businesses to stand the best chance of achieving long-term success, it’s important they take advantage of system upgrades that will ensure business procedures remain simple and co-ordinated.

Upgrading an ageing system will pay for itself much quicker than many might expect. An up-to-date ERP system will increase financial control and project visibility, which aids managers and employees in making the best decisions.

It can also save huge amounts of time as older solutions tend to slow down due to ageing IT infrastructure not being able to handle day to day demands on the system - to the point that entering data and creating reports takes even longer. Technology is developing at such a pace that older systems can swiftly be overwhelmed by the volume of data being input into them, along with the pace with which this information needs to be found and shared across multiple platforms.

Updated ERP systems will usually store data in a more efficient way, meaning it’s easier to find. This helps to avoid the frustration associated with wasting time searching through disparate systems and inaccurate data.

Businesses that have been left with an inefficient system due to rapidly evolving technology are in a dangerous position as productivity and financial control can be lost throughout the organisation. Systems should be updated because a well maintained ERP system is able to do things much more efficiently, saving potentially vast quantities of money and staff time that can be turned into billable hours.