Why Enterprise Resource Planning (ERP) needs an Overhaul

Enterprises that have legacy ERP systems might enable them to save a substantial amount of financial resources but will not offer the competitive edge that businesses require to scale at an exponential rate in the current digital world.

Many businesses have already modernized their enterprise resource planning stack and are reaping complete benefits. ERP modernization is an intricate process that needs more strategic planning because it is more than just a few upgrades. Business leaders should analyze if the big overhaul is worth the business disruption and which aspects of the traditional enterprise resource planning need immediate attention. Here are a few reasons why the legacy ERP systems need an overhaul:

Ingraining progress-oriented culture

In a fast-evolving global environment due to globalization, compliance policies, changing customer demands, tech stack, and other factors, Legacy systems are creating huge amounts of technical debt that hinder businesses’ growth. Enterprise resource planning is all about processes, people, and system efficiency and not business transformation. It requires a more strategic approach that includes all the aspects of the enterprise supply chain, right from procurement to end users.

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Modern enterprises should consider shifting to “as-a-service” to have a tremendous impact on accounting, inventory, and channel management because legacy ERP tools have become obsolete and are not able to suffice the demands of modern enterprises. Rigid purpose-driven enterprise resource planning architectures are not agile enough to seamlessly accommodate new revenue channels, change, and other compliance requirements. Globally disbursed enterprises find it a challenging task to manage compliance efficiently because of different regulatory bodies with evolving policies. Legacy ERP systems are unable to gather data related to compliance, nor are they capable of tracking the updates in the rules and regulations.

Align people and processes with technology

Traditional approaches and restricted IT talent will hinder the decision-making processes and will increase the implementation time required. But a few business leaders consider ERP overhaul as an intricate and expensive task that is not with the investment and business disruptions that it would imply.

Business leaders need to modernize their enterprise resource planning tech stack and approaches that enable them to overcome their current infrastructure limitations and spot all the opportunities that help their organization scale.

As there is a surge in the need to get more accurate business insights in real-time to gain better agility, efficiency, and productivity is driving enterprises to modernize their ERP tech stack.

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Businesses need to understand that modernizing their tech stack does not mean replacing legacy tools with new ones in the market. Organizations need to leverage robust tools like Artificial Intelligence (AI), Machine Learning (ML), and Automation to revolutionize tedious manual roles into more strategic ones. Enterprises can successfully modernize their Enterprise resource planning when they align people and processes with technology. Modernizing legacy ERP systems with cloud-based ones will help businesses to accelerate their digital transformation initiatives by making information accessible to all who require it in an ecosystem to ensure scalability by responding to change quickly. CIOs should consider developing a strategic plan to align ERP modernization with future business goals.

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