Should legacy systems be replaced? Yes

Neil Young says it's better to burn out than fade away. Maybe in life that's the case, but in the world of legacy applications, fading away is, realistically, what usually happens. There are many reasons why businesses keep a portion of their IT infrastructure on legacy applications -- oftentimes from fear of pulling the plug. These companies should consider this: the power of moving at least their core applications over to a modern, integrated system can deliver huge benefits.

Here are three reasons why:

  • The competitive factor. Some 95 percent of our clients adopt NetSuite to replace patched-together legacy systems that can't share essential data. The lack of transparency throughout the system, these companies found, seriously hampered their ability to compete. Compare tracking an order in a legacy system to a modern, Web-based integrated application. Order management is a process that starts from the first point of customer contact and ends with the fulfilment of the order. Older systems required a great deal of expensive customization to link this process across a salesforce automation module, ERP system, order management application, and then the warehouse and fulfilment systems. Often glitches will remain - data, say, must be entered multiple times at multiple points and customer information usually remains siloed throughout the system.
  • Regulatory issues such as the Sarbanes-Oxley (SOX) Act. Depending on the industry, the process of managing customer data must be relentlessly tracked and ready to be produced to auditors at a moment's notice. Other new regulations, especially privacy laws, touch upon customer data. Here, the main challenge is that too many systems are providing access to customer data. Ultimately, SOX is about the processes for managing data, not the data itself; therefore, reducing the number of legacy applications required to run your business will certainly make SOX compliance easier and less expensive.
  • Newer systems are far easier to use. User interfaces in legacy systems, especially first-generation ERP systems, rarely match the way people actually do their jobs. They also require the intervention of highly (and expensively) trained IT staff. Consider predictive analytics, an essential component to most marketing and sales systems today. To use them in legacy systems, engineers trained specifically in these methodologies must do the programming. Newer applications, by contrast, have analytical applications built directly into the marketing and sales operations. A typical business user can program and use this embedded functionality with little or no assistance.

Also, when the application is delivered through the Internet, users have 24/7 access to real-time data. In an integrated Web-based system, data never has to be entered more than once -- the most common origin of mistakes -- and its status is available to everyone from the accounts receivable department to customer service to a sales rep trying to land yet another order with the same customers.

Nelson is president and CEO of NetSuit

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