How much is your business software costing?

IT Systems are rarely the number one priority for business owners.

As a tech company, it pains us to say this but it’s true! Senior staff will always be focussed on more pressing things to their business and if a business management system isn’t broken then why fix it?

However, there are usually significant hidden costs to maintaining a legacy system that Managers and Directors don’t see.

In 2015 Hitachi Consulting commissioned research that found legacy systems were holding back 90% of businesses. Nine out of ten IT decision-makers found that old fashioned business systems are preventing them from harnessing the digital technologies they need to grow and become more efficient.

If it ain’t broke…

“If it ain’t broke, don’t fix it!” is a great adage for many things on life, but not necessarily the software that runs your business! The cost and effort needed to replace old systems can be steep, but companies often don’t factor in the cost of:

• Maintaining existing systems
Every customisation, tweak and change made adds a layer of complexity to maintenance. After years or even decades of this a legacy system can become an unmanageable beast. Updates become a time-consuming chore, a small change made to one part of the system might break another part.

• Finding People with the skills to run very old software
A modern software system will always be attractive to a large pool of talent. If your business is propping up a dated solution, then expect the number of available people with the knowledge and inclination to deal with it to be significantly lower.

• Integration Costs
You need an add on to your operations, something straightforward but something that can seriously optimise the way you do things day to day. With a modern system this isn’t a problem, with a legacy system however this become a complicated and costly procedure. That fancy (and necessary) application wasn’t built with your old-school setup in mind…

Buried Treasure, me Hearties!

Legacy systems sometimes run the largest companies in the world. However, these situations have been likened to buried treasure, a wealth of information that could be supporting business strategy hidden away behind proprietary code and old technology.

Out Here on My Own…

When you come across a problem with your system what’s your first port of call? With a modern, well supported solution it’s probably Google, or even your vendors dedicated support blog. With an old system it feels like you’re first and only option could take some time…

Riskier than you think

Legacy systems may have been in use for 20, 30 even 40 years. They are usually stable but entirely inflexible and have been made brittle by years of ad hoc maintenance. This bespoke patching up, plastering over problems will make an ERP expensive and difficult to keep going. This problem will only be going one way…

60-80% of IT budgets on average are spent on maintaining legacy applications. Previous research put this figure at 50-70% suggesting that the expense of maintain these systems is growing as they age.

Simply ripping out and replacing an ERP system is never easy and often not even feasible. For industries such as construction, retail and finance it is possible, with a well implemented five-year plan, to efficiently update a system.

However for industries such as Banking it can be borderline impossible to smoothly reconcile hundreds or even thousands of disparate components and interdependencies.

Some Signs your System might be costing you

• You’re unsure of the overall cost of maintaining the system: Manual workarounds are adding up and there are more plasters over the cracks than you can count

• There’s no safety net: You don’t know if your business could run as usual in the event of a hardware/software crash. Replacement parts or even the original installer are unavailable

• Your system is stunting growth: you can’t export or import data from other systems, if the company were to expand you’re unconvinced the system could grow with it

• Your customers are starting to notice: they’re using modern tools and out the box solutions that don’t seem to integrate well with yours.

Deciding to upgrade your ERP

Upgrading an ERP system, whilst it may be necessary, can still be a daunting process. ERP projects are notorious for failure and it is essential that you have both the correct vendor and a solid roadmap.

For more information on how Metaphorix implements Microsoft Dynamics NAV get in touch today!

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