The answer is simple and straightforward: because legacy systems have been customized to keep your company’s current infrastructure running.
This means that they hardly accommodate fast-expanding movements, often plastering processes and delaying the scalability of results. Legacy systems are not future-proof, that is, they cannot keep up with the evolution of growing companies.
Even so, they are still present in many companies, especially when we focus on the ERPs in use. Especially in an expansion phase, inflexible systems can risk competitiveness and hinder leadership in an increasingly agile and dynamic market.
Companies with legacy systems often can’t run their business with as much agility, resilience, speed, and scale as competitors with more modern technologies.
The main problems they usually face are:
- Data inconsistencies, inefficient processes, and difficulties in generating comprehensive reports
- Complex and costly customizations that require specialized technical expertise to update
- Difficulties in responding to rapidly changing market circumstances
- Delays in decision-making due to delayed reporting cycles and analysis of manually and time-consuming extracted and manipulated data
- Costly operations management
What do companies look for in a modern ERP?
A recent IDC survey sought to understand what companies mean by a perfect ERP. The main results can be seen below:
As you can see, flexibility, agility, speed and ease of integration are the most valued items when it comes to the adoption of a modern ERP. These attributes are basic requirements in the digital age.
Understanding that the underlying systems don’t need to be customized is another aspect of equal importance. Most modern enterprise applications enable configurable workflows that don’t impact the core of the product, keeping data scrubbed and ensuring a smoother path to updates and innovation.
This concept is called clean core.
But what is Clean Core?
IDC defines the clean core as the core of the technology system that remains scrubbed so that the data it contains—configuration data, master data, and transactional data—is not affected by additional customizations.
By adopting the clean core ERP strategy, companies can adopt the latest version faster and easier, reduce modifications, and maintain extensions and customizations, thanks to the cloud-compatible framework.
When they standardize on underlying ERP operations, companies can leverage best practices and only need customizations to differentiate the business. Clean core enables companies to:
- Add functionality, extending what is needed without affecting the built-in standards.
- Enable the system to be integrated with other systems and extensions for additional functionality, without affecting the data on it.
- Use the business processes contained in the system without modifying the contents of the system.
- Innovate as needed, without costly testing times or additions to workflows.
Companies that use the clean core strategy find that they can develop and use innovations on their own or with a partner at a rapid pace.
They also say that updating the system is simpler, takes less time, and doesn’t impact legacy operations and systems, allowing more resources to focus on deploying innovation rather than pursuing bespoke extensions and integrations.
How can Rise with SAP accelerate digital transformation?
RISE with SAP represents a milestone in companies’ journey toward operational excellence and innovation in the cloud. This revolutionary approach combines intelligent technologies, cloud infrastructure, and migration services to drive organizational growth and agility.
At the heart of RISE with SAP is the powerful SAP S/4HANA Cloud ERP system, private edition. This intelligent solution integrates all key business functions, from finance to sales, procurement, and production, into a unified, highly efficient platform.
S/4HANA, powered by advanced in-memory computing technology, delivers real-time analytics, predictive insights, and streamlined processes.
This empowers businesses to make agile, data-driven decisions, responding quickly to changes in today’s dynamic marketplace.
See also:
Migration to SAP S/4HANA: what is the impact of excessive customizations?
By adopting S/4HANA Cloud, businesses can eliminate unnecessary customizations and take advantage of best practices built into the system, allowing for a more efficient and agile operation.
The integration of data sources and business functions ensures a cohesive and intelligent ERP environment, providing advanced analytics capabilities so that businesses can access real-time insights and make informed decisions.
With RISE with SAP, companies have the opportunity to drive digital transformation, optimize processes, and achieve new levels of business success in the cloud era.
Ready to take your ERP to the cloud? Count on Origen Tech!
Origen Tech is a leading global SAP VAR partner with over a decade of experience and hundreds of customers.
Its unique SOLaaS (Solution as a Service) methodology offers the best cost-benefit to purchase an SAP license and migrate to the SAP S/4HANA universe 100% in the cloud.
SOLaaS is based on a monthly fee model, without the need for a large investment down payment.
Get in touch with our experts today and learn more details!
