Your Legacy ERP Transition Is Rough: 5 Pain Management Solutions
Enterprise resource planning (ERP) solutions are costly to implement, with an average total cost of ownership around $4.5 million, according to Panorama Consulting. ERP’s break-even point ranges from one year to over five, with 35 percent of companies reaching this point by three years. These solutions are designed for long life cycles for profitability, but changes in technology infrastructure over the past decade create an environment where legacy systems hinder your productivity.
The Aberdeen Group found the average ERP system is seven years old. These legacy systems can put a heavy weight on a company, and even more modern customized solutions are moving into the legacy category as cloud-based solutions gain ground. You can’t eliminate the pain caused by moving from a legacy ERP solution to a new system, but you can manage it.
1. Choose Your Data Wisely
If your legacy ERP system has been in use for years, its databases have a substantial amount of information. When you’re migrating to a new solution, how much of that data is actually relevant and usable? You need to choose your databases prior to migrating them to a new system so you’re not pouring time and energy into large data sets you’re not going to use. Data cleaning is also a helpful part of the migration process, as you aren’t spending the time transferring bad and duplicated data.
2. Map ERP Functionality to Existing Business Processes
ERP solutions are supposed to create a more efficient and productive work environment. If you choose a new ERP system with different business processes, your operational disruption could extend months after deployment. One of the top reasons to implement a new ERP system is to improve your business performance. If you don’t choose a system that complements existing work processes, you run into long-term productivity loss.
3. Go Hybrid
Another way to handle a transition is by keeping relevant parts of the legacy system and integrating it with the new. Gartner predicts most companies will adopt some form of hybrid ERP solution within the next five years, whether that’s integration with a legacy system or using a best-of-breed configuration within the cloud. A hybrid ERP minimizes business process disruption and allows employees to work within a familiar system throughout the deployment process.
4. Consider the Cost of Connection
The downside of hybrid ERP is the integration cost. You need to choose a new solution designed to connect with your old solution. If integration wasn’t a priority when the legacy system came into play, it may require costly development time to create custom integration between the two. In some cases, the cost of connection is too high, and you should cut your losses and avoid a hybrid configuration.
5. Create a Change Management Plan
Before an ERP transition takes place, establish a change management plan to help with a smooth deployment. Change management plans examine potential issues during the deployment process and solutions to minimize operational disruption, including what to do with employees having problems with the new system.
Throwing out the old and going with the new can be a long and costly proposition for your company. Minimizing the pain helps you realize new ERP benefits sooner, as well as avoiding an ERP deployment failure that plagues many implementations.