What is an ERP System?

An ERP system is a complete, comprehensive, and integrated business suite that provides integration with various business processes and data across different departments to meet varying functional needs. ERP enables businesses to act quicker, make data-backed decisions, increase profitability, and provide higher satisfaction to various stakeholders.

ERP systems are designed to adapt to changing business needs in today’s highly dynamic business landscape. Your business will benefit from data consolidation, improved customer support, lower data entry, and faster efficiency.

What is an Aging ERP System?

An aging ERP system is an ERP that has attained its end-of-support period. End-of-support refers to a period after which the ERP software vendor discontinues customer support, upgrades, bug fixes, and other services related to an older version of the software. After reaching the end-of-support period, the business can continue using the ERP. However, the product will become vulnerable to potential technical, business-specific, and security vulnerabilities, in the absence of new features, updates, and bug fixes.

Risks Associated with the Usage of Aging ERP Systems

There are several risks associated with the usage of aging ERPs:

Security Vulnerabilities

Many small and mid-sized companies still rely on outdated ERPs due to a limited budget. Many cyber criminals exploit vulnerabilities in the old ERPs to infect business computers with malicious files, encrypt users’ documents for ransom, or leak trade secrets. Using an obsolete ERP system can introduce your business to potentially disastrous problems.

Lack of Cloud Integration & Mobility

Modern ERPs support integration with the cloud and remote work with mobile. While the cloud allows storing business data securely on the vendor’s server, the remote access feature allows accessing it from your mobile, at any time, from any location, regardless of the device. These features are critical, especially for small and mid-sized companies who find them affordable compared to on-premise deployment. Aging ERPs may lack integration with these modern technologies, restricting you to a handful of limited features.

Productivity Declines

In today’s globalized business landscape, businesses are expanding vigorously in international markets and working to fulfill the ever-rising customer expectations. Using an obsolete ERP can introduce your business to another problem — the loss of organizational productivity. Your system may not support newer features that streamline business operations and ease and simplify various functionalities. While there are third-party workarounds to keep the system running, adopting such strategies can be complex, time-consuming, and unreliable.

Non-compliance with the Latest Government Regulations

Older ERPs are designed to meet the regulatory challenges of their period. Government rules and regulations keep changing from time to time. Relying on an obsolete ERP can risk your business to severe regulatory challenges including fines, penalties, and lawsuits. 

Poor Customer Experience

Outdated ERPs may take forever to load the customer data and cause delays in various customer-centric operations such as customer support, invoice generation, and order confirmation. It risks the business losing to its competitors and a negative brand reputation.

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Business Disruptions

An outdated ERP is vulnerable to technical problems such as system crashes, freezes, and errors. It can lead to frequent disruptions in business activities and ultimately affect various business operations such as production, procurement, planning, inventory, warehouse management, lead management, sales, and financial management.

Best Alternative: Cloud ERP

If you’re a small business and stuck with an obsolete ERP, a Cloud ERP is your budget-friendly alternative. It is a cost-effective solution that comes with a monthly or yearly plan.

Cloud ERP is continually upgraded by the vendor, which eliminates the hassle of manually upgrading the software. You will continue to have access to new features and cutting-edge functionality, and attend to your scalability needs.

Other Benefits of Using Cloud ERP

Lower Upfront Costs

With Cloud ERP, companies leverage the cloud technology which eliminates the outright purchase model and saves licensing costs, and hardware upgrade expenses. Cloud ERP is especially beneficial for small and mid-sized companies with limited budgets.

Security Enhancements

Cloud ERP uses robust file encryption technology to protect the customer’s data from being stolen, changed, or compromised. It uses a unique digital key or a secret password for scrambling the plain text into ciphertext and concealing the confidential information.

Real-time Data Analysis & Reporting

Cloud ERP facilitates real-time data analysis and reporting that improves your company’s performance at all levels, and provides up-to-date and accurate information with the right tools in your hands. Businesses can benefit from immediate, ongoing access to data to drive change.

Remote Access to Your Data

Unlike On-premise ERPs, Cloud ERPs support collaboration from different regions and time zones. Everyone in the team can access the data using a smartphone, tablet, or computer, regardless of their time and location. Remote accessibility can be a handy feature for businesses that provide remote work and hybrid options to their employees.

Scalability

Cloud ERPs are extremely scalable. You can scale them up/ down to meet the ever-changing needs of your business without impacting the system’s performance and reliability. It makes them more economical and usable than On-premise ERPs that incur additional costs for hardware and software upgrades.

Faster Performance & Superior User Experience

Cloud ERPs are hosted on high-speed, cloud servers of the ERP vendors that deliver real-time data with a multi-tenant architecture. Moving from On-premise ERP to Cloud ERP translates into reduced physical resource usage for your company.

Wrapping up

ERPs have immense potential to transform your business and achieve growth, excellence, and agility. However, as they age, you risk getting left behind with a vulnerable system, missing out on new features, and disengaging your workforce. A Cloud ERP can come to your aid if you’re low on budget. Be sure to evaluate your specific business requirements, migration needs, and existing setup before opting for the new system.

Sage X3 is a comprehensive ERP system that offers a robust range of capabilities. It is an easy, intuitive solution that offers multi-company, multi-site, multi-currency, and multi-lingual functionality. It can adapt to the unique n needs of your company and help drive sales, profits, and growth.