Digital Transformation

Modern ERP Vs. Legacy Systems: Comparison Guide

Some of the major differences between legacy systems and modern ERP solutions are in their level of scalability, flexibility, depth of data analysis, and productivity.

Blog Post

8 minute read

Feb 14, 2024

If you or your kids are into gaming, you might appreciate and even revel in the nostalgia that comes from playing an older system like the Nintendo 64 or the Sega Genesis, but as far as the underlying technology goes, new generation consoles simply blow these older systems out of the water in every performance category.  

When it comes to your business technology, performance is undoubtedly the most important factor to consider. That’s why it’s crucial to implement modern technologies that bring additional capabilities to the table, streamlining processes and increasing money-making activities.

Many businesses without modern ERP systems don’t recognize the limitations of their current system because, for so long, it’s gotten the job done. But ERP systems have come a long way.

Read on to learn more about these newer systems and what they can do for your business that legacy systems cannot.  

If you know you need to update your business technology suite but don’t know where to start, take a minute to read Impact’s eBook, Fast-Tracking Your Digital Transformation for some ideas on how to begin. 

Why Legacy ERP Systems Don’t Work Today

Relying heavily on a legacy ERP system may seem harmless because it’s still working and it’s always gotten the job done, right? Many businesses don’t actually realize the harm that such old technology is doing to your business in areas like innovation, overall cost, and production.  

what is a legacy ERP system not doing for your business

Here are four of the ways that an outdated legacy ERP system hinders a business: 

1. Outdated Technology

2. Lack of Scalability and Flexibility

3. Incompatible

4. Increased Costs

1. Older Systems Contain Outdated Technology

Legacy ERP systems have been in service for a long time, especially for businesses that adopted them into their operations early on. In that time, though, technology has improved immensely and the difference between old tech and new tech is growing larger every day.   

This doesn’t just apply to the ERP systems and tools themselves, but also to the software they were designed to integrate with. Much of this tech is now obsolete and no longer supported or receiving updates from its developers.

This is problematic for two reasons. First, if your ERP is incompatible with other software you’re using, it’s already failing. Secondly, if it’s no longer receiving updates, its security protocols will be outdated and become a vulnerability.  

2. Lack of Scalability, Flexibility, and Adaptability

Many older, legacy systems lack the ability to connect to the cloud and must be physically installed on business systems, and can only be accessed by devices directly connected to it. This severely limits a business’ ability to be flexible in its work style (remote work, work from home, etc.) and makes it extremely difficult to match personnel growth.  

If you want to grow your market share, brand awareness, or even just the traffic to your website and social media, you’re going to need an ERP system. Not just any ERP though, one that evolves with you so that you don’t run into major roadblocks as you begin reaching milestones on the way to your ultimate goals. 

3. Incompatible With New Innovations and Regulations

Another major flaw of an older ERP system is its incompatibility with newer programs that can improve the way they operate. This includes adopting new software, integrated AI features and tools, and regular software updates.  

Outdated ERP systems will also leave you high and dry when it comes to any newly published data security regulations that apply to your business. This can prove to be a major problem if you’re found non-compliant by a governing body and issued fines or worse. 

4. New Compounding Costs

The inability to integrate with new programs, take advantage of the latest innovations, and perform tasks and processes that a modern ERP easily does ends up costing businesses dearly. The money that businesses think they’re saving by pushing off the implementation of a modern ERP system is being burned due to their performance potential being stunted by an outdated one.  

Competitors aren’t waiting around and relying on “what’s always worked.” They’re pushing the boundaries of what they’re capable of by streamlining old time-consuming processes and beefing up productivity thanks to the help of new programs, software, and technologies available to newer ERP systems.  

The Advantage of Upgrading to Modern ERP Systems

On the other side of the coin, businesses that have a modern ERP system benefit from what the latest technology offers, including:  

1. Centralized Data

2. Powerful Reporting

3. Scalable and Flexible

4. Easy Integrations

benefits of a modern ERP system

1. Centralized Location for Business Information

One of the biggest benefits of having a modern ERP system is its ability to use the cloud to make business data available to more people in more places.  

Employees can more easily access information without having to be on-site or plugged in. This means that collected data can be used to make more informed decisions based on actual trends and reporting.  

By centralizing your data, you’ll also be able to establish a streamlined backup and recovery process that runs automatically on a set schedule. 

2. More Accurate Data Reporting

Speaking of reporting, a modern ERP system eliminates the manual side of reporting by collecting and structuring data that can be used to create custom reports. This not only creates faster, more useful reports but also more accurate reports by eliminating human error from the equation.  

One of the strongest features that newer ERP systems offer is deep data analysis. With the power of AI and advanced machine learning, the data analysis you can conduct with a modern ERP is much more powerful than what was capable with their predecessors.

3. Scalable and Device-Friendly

Another benefit of cloud implementation is the ability to adapt depending on what you need from it. Additionally, you can easily onboard more devices and employees with modern ERP systems thanks to the streamlined implementation process.  

Ease of onboarding and scalability will be massive wins as your organization expands and you need to bring on more employees but don’t want to bottleneck current operations. 

4. More Integrations with Modern Tools and Software

We are in a golden age of digital software tools for businesses. Nearly every problem can be solved when you have access to the right tools. A modern ERP system can integrate with a huge spectrum of modern software, ultimately giving businesses the ability to use all the latest software in daily operations.  

With a modern ERP system, you can interconnect your entire suite of business technology and create stronger, more efficient, and less expensive workflows. 

Modern ERP Systems Vs. Legacy Systems

Comparing modern ERP systems to outdated legacy systems, after so many years of advancement in technology, is very much like comparing apples to oranges. Modern systems simply contain new features that did not exist before, have been improved upon, and have eclipsed old versions completely.  

difference between modern ERP and Legacy systems

Final Thoughts on Modern ERPs 

Modern organizations need a certain baseline of technology to remain competitive in the current marketplace. The simple matter of fact is that with an updated ERP system, you can cut operating costs, improve productivity, and enhance the employee experience – ultimately increasing profits and cutting expenses.

Business owners are busy, and your technology can become outdated in what feels like the blink of an eye. If you’re looking for some advice on revamping your business technology, check out Impact’s eBook, Fast-Tracking Your Digital Transformation


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