Your Traditional ERP System vs. A Modern-Day ERP System
Major enterprise organizations are embracing modern enterprise resource planning (ERP) solutions faster than ever. The COVID-19 pandemic accelerated digital transformation, forcing many businesses to re-strategize and take a hard look at outdated technology practices. SaaS and tech companies are going public at warp speed, with some industry players moving from start-up to exit in as little as five years. As companies continue to push for reduced time to IPO, these industries require software solutions that are dynamic and scale to grow.
In many instances, traditional—or legacy—business management software can no longer cut it. So, what should you do if your SaaS business is looking to update its legacy ERP systems? In this blog, we’ll discuss what legacy ERP systems and modern ERP systems are, compare the systems side-by-side, and offer insight into what to expect when moving forward with a modern ERP system.
Legacy ERP Systems
ERPs have been around for longer than you might expect. Legacy ERPs were first conceptualized in the ’80s, borne from early manufacturing resource planning systems.
The first legacy systems were centered around manufacturing processes and had grown from simple inventory tracking systems into advanced coordination, scheduling, and operations software systems. These early ERP systems were installed as on-premises software, requiring a dedicated team of IT specialists and a great deal of computing power.
Traditional ERP systems are notorious for being slow and error-prone. The more functionalities are added to these legacy systems, the more siloed each department’s data becomes. Greater demand for advanced analyzing capabilities and third-party integration eventually drove software engineers to seek a better solution.
Modern ERP Systems
Since the widespread adoption of the internet in the ’90s, ERP systems have expanded dramatically in their application, equipped with industry-specific features and end-to-end business management solutions.
Today, ERP systems are capable of complex finance and accounting capabilities, customer relationship management (CRM), human capital management (HCM), procurement, inventory, and other critical business operations. Designed to be utilized by various departments throughout the organization, modern ERPs are able to streamline the entire business.
Modern ERP systems are agile and fully customizable, with special configurations available to many industry verticals. SaaS companies can take advantage of advanced ERP features such as financial and accounting compliance, revenue recognition, subscription, and recurring billing management, and streamlined reporting features. Modern ERP systems enable SaaS providers to connect disparate systems and streamline finance and account management by automating manual tasks and organizing reports. These solutions out-perform legacy systems, as they support business growth and help companies scale as they expand operations.
Modern ERP Systems vs. Legacy ERP Systems
| Modern ERP | Legacy ERP |
| Generally hosted on the cloud, can be installed on-premise | Only installed as an on-premise program |
| Widely accessible across various devices and locations | Available through desktops or a LAN connection |
| Automatically updated | Manually updated |
| Integrations and customizations are easy with pre-built modules and simple programming | Integrations are time-consuming and resource-intensive given the limited functionality |
| Around-the-clock support and staff training | Support is erratic and requires on-premise assistance |
| Sophisticated analytics and reporting dashboards updated in real-time | Basic reporting capabilities requiring manual updates |
Given the choice between a legacy ERP system or a modern ERP system, advanced ERP systems beat out traditional software programs every time. If your business is currently working with an antiquated legacy system and you are looking to upgrade your business management platform efficiently, kick off your journey to modernization with these helpful tips.
Moving Forward—What to Expect When Implementing a Modern ERP System
While choosing to utilize an advanced business management system is undoubtedly the right move, it’s important to be patient with the modern ERP implementation process. Although every business is different, and therefore every implementation process is different, there are a few standard processes you can expect when upgrading your system.
Establishing a Plan
In this early phase, you’ll begin to map out timelines, budgets, modernization goals, business needs, and other important business management considerations. You’ll need the collaboration of key stakeholders from every department during this phase, as modern ERP systems impact the entire business.
Current System Migration
Expect the process of moving critical data from your legacy ERP system over to your modern system to take a bit of time. During this phase, your service provider will transfer your old data and connect your new system to other third-party solutions, cloud-based apps, and on-premise systems.
Personalizing Your System
Modern ERP systems can be implemented with specific SaaS needs in mind. During implementation, work with your service provider to personalize and configure your new system in a way that makes sense for your software demands.
Elevate Your Business Management with Cloud Technology and FRC
Finding and implementing an ERP system that prioritizes your company’s main areas of focus is no easy task. We understand that. At FRC, our team of software specialists support clients through their entire ERP journey and offer ongoing support, so your team can confidently progress into the future of cloud-based business management.
With over 25 years of expertise, we offer consistent support and guidance whether you’re in the early stages of ERP selection, or ready for implementation.
Want to learn more about leveraging the power of cloud technology to gain better company-wide visibility? Connect with our team.