Enterprise Resource Planning (ERP) gifted industries with a series of benefits like better planning, control, and improved efficiency. Legacy (on-premise) ERP systems function on servers or computers owned and maintained by the user but companies are rapidly migrating from legacy ERP systems to cloud-based systems because of the rising implementation and maintenance costs.
Legacy systems refer to software or hardware that is currently in use but outdated. These systems no longer receive the latest updates and fail to adapt to newer systems thus stunting the growth of the company using it.
End of Legacy, Start of Cloud?
One of the deciding factors in the legacy vs cloud battle is scalability. Legacy systems require constant updates, a dedicated IT team, and incurs high maintenance costs, whereas cloud-based ERP systems cost half as much, provide high ROI, and virtually nil hardware costs.
Data Security is another pressing issue among big corporates. But most cloud-based ERPs now offer state-of-the-art security measures like data encryption and two-factor authentication.
Cloud ERP systems are now capable of smart data management - from demand prediction to automation to data-driven decision making, cloud ERP solutions have come a long way from
5 Major Differences Between Legacy and Cloud ERP Systems
Let us start from the basics, the implementation time is dependent on the size of the business for both legacy and cloud systems. Legacy systems typically take 1 to 2 years to implement, Whereas cloud systems sometimes only take a few weeks to few months to implement. Legacy ERP systems or on-premise solutions consume more time because they require hardware installations, configuration, and hosting to set up. Note that more time to production means devoting your resources, time, and money to the process.
Cloud ERPs however require no hardware installation. Businesses can directly move into key processes like data migration, custom workflows, and employee training and avoid spending time on hosting updations and maintenance thus saving both time and money.
Implementing a legacy system is expensive for companies on multiple fronts. Businesses need to buy both hardware and software before implementation and also handle the upfront costs for installation. Additionally, any maintenance costs incurred are also to be levied on the business from time to time.
Cloud ERP solutions, however, work on the software as a service (SaaS) model where companies only need to pay the subscription fee - which provides you with the right to use the software. The subscription fee varies according to the type of software you choose thus considerably reducing the upfront cost for the company.
Legacy systems are infamous for ‘version locks’. Version locks put the organization at risk as there is no room for innovation or scalability.
Businesses normally own the hardware of legacy ERP systems, hence the maintenance and related updations are the responsibility of the company. For legacy systems, updates are addressed through a VAR ( value-added reseller) or an in-house team who should be well versed in your ERP system.
In cloud ERPs, the vendor takes care of all the updates and maintenance without involving the business or its resources.
4. Access Anywhere
Cloud ERPs are available everywhere and accessible through any device 24/7. Cloud vendors even offer dedicated mobile apps for ease of access. Having real-time updates of your warehouse, manufacturing units and inventory levels can give you a competitive edge in this fast-paced world.
Legacy systems are confined to the four walls of your buildings and have zero chances of remote access.
5. Future Scope
Cloud ERP systems are the future because it integrates with all future technologies like IoT, machine learning and data analytics. In a data-driven world, corporates and companies stand a chance to win with cloud ERP systems. Legacy systems on the other hand can only add to increased budgets and complexity.
Why Not Implement the World’s First Cloud-Based ERP System?
Oracle NetSuite is the world’s first cloud-based ERP system. Over the years they have refined their processes and is currently the leading ERP provider in cloud-based solutions.
NetSuite’s achievement was not born overnight; rather it is a well-tested software that believed in the future scope of the cloud. Now Netsuite’s cloud ERP empowers thousands of companies across the world and hosts a powerful suite of ERP applications including inventory management, distribution, eCommerce, logistics, sales, financials, CRM, and more.
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