Many organizations today still rely on legacy systems, which are outdated and were developed decades ago. This system was typically developed in the early 2000s and was designed to integrate data of various business processes, such as finance, procurement, manufacturing, and human resources. These systems often face several challenges, such as a lack of agility, scalability, and integration capabilities, as well as security vulnerabilities and high maintenance costs.
Are you facing these issues with an outdated Legacy ERP system?
Well, we have a solution: you can opt for a transition to Modern ERP system. But how?
With the rise of cloud computing, organizations can now modernize their legacy systems and unlock their full potential. Cloud computing allows businesses to move their applications and data to a secure and scalable environment, reducing the need for on-premises hardware and infrastructure.
For more info, continue reading the article!!
Legacy ERP: SAP ECC 6.0 EHP 618 and their previous versions
A legacy ECC system that was once useful is now an antiquated piece of technology. In the past decade, over 10,000 medium- and large-sized businesses have used an ERP called SAP Enterprise Central Component (SAP ECC). SAP ECC was in use for various industries, including fast-moving consumer products, steel, chemicals, and pharmaceuticals.
The latest version of SAP ECC is SAP ECC 6.0 EHP 618, it uses enhancement packages as a means of introducing new features and improving its software without requiring users to switch to a brand-new version. It is designed to streamline and integrate various business processes such as finance, human resources, procurement, supply chain management, and more. The software provides a single platform for businesses to manage and analyze their data, helping them make informed decisions and optimize their operations.
I understand the Query in your mind, “If ECC is that good, then what’s the need to change?”
Let’s look at some of the business pains caused by Legacy ERP.
Top 9 Reasons that indicate a Transformation from SAP ECC
- High Maintenance Cost: Users discover that the costs of maintaining legacy systems are high – significantly more expensive than it would be to simply update your software and hardware.
- Low efficiency: Legacy systems frequently have terrible efficiency, described as having lengthy load times, delays, and other issues.
- Less Compatible: Newer software and older software simply don’t interact well. Because of this incompatibility, you will probably discover that you need to employ more systems.
- No more Support: Most legacy systems are no longer supported by their manufacturers because they are no longer being marketed, depending on their age.
- Out-of-date: SAP announced that it will end support for ECC in 2027. This means that after that date, SAP will no longer provide updates or security patches for ECC.
- Complex System scaling: A legacy ERP system has high operational expenses, and scaling the system is a difficult and time-consuming procedure.
- Outdated Systems: SAP ECC operates using outdated computers and servers, which don’t meet the needs of contemporary businesses.
- Lacks Flexibility and Extendibility: Older ERPs are unable to provide the flexibility, scalability, and agility that modern enterprises need.
- Needs IT resources: While managing legacy ERP systems requires a lot of IT resources, cloud ERP systems provide you with the freedom to operate without this restriction.
If you think this is not enough, let us list out a few issues you might be facing across your various lines of business;
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Human Resources:
➔ The user interface of SAP ECC is difficult to navigate and not intuitive for HR activities.
➔ It is difficult to customize the software to meet the specific needs, this lack of flexibility leads to inefficiencies in HR processes.
➔ Integrating SAP ECC with other HR systems is a complex process and requires additional customization and development work.
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Sales:
➔ SAP ECC is not designed to be mobile-friendly, which is a problem for sales teams who need to access sales data on the go.
➔ Lack of integration leads to data silos, which makes it difficult for sales teams to access the information they need to close deals.
➔ SAP ECC is slow, which results in inefficiencies and delays in the sales process.
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Finance:
➔ SAP ECC is not designed for decision-making; thus, an impact is created by inaccurate financial forecasts.
➔ SAP ECC involves high audit costs, which impacts profitability.
➔ Risk of Financial loss and fraudulence are high while implementing SAP ECC in finance.
➔ Inefficient accounts payable processes resulting in errors and delays.
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Sourcing and Procurement:
➔ SAP ECC’s sourcing and procurement modules require complex configuration, this leads to delays in implementation and requires specialized skills to maintain and update.
➔ SAP ECC’s procurement processes lack visibility, making it difficult to track and manage suppliers and inventory effectively.
➔ SAP ECC’s procurement modules may not facilitate collaboration between departments.
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Supply chain:
➔ SAP ECC’s supply chain management modules may not provide real-time visibility into inventory levels, order status, or shipment tracking.
➔ SAP ECC’s demand forecasting module lacks accuracy, leading to overstocking or stockouts.
➔ SAP ECC’s supply chain processes are inflexible, making it difficult to adapt to changing business needs.
Since we’ve seen a huge list of issues, now it’s time to speak about the solution;
Modern ERP: SAP S/4HANA
The SAP HANA in-memory database is the foundation of the most recent ERP solution from SAP, which helps businesses to carry out transactions and does in-the-moment analyses of corporate data. With a current user interface powered by Fiori, integrated real-time analytics, and in-memory computing powered by HANA to handle enormous data volumes of operational and transactional business data, SAP S/4HANA is designed to make company operations simpler, faster, and more efficient.
Moreover, SAP S/4HANA resolves issues with batch delay, manually operated procedures, and data sprawl that have existed in conventional ERP systems.
Business benefits of adopting SAP S/4HANA Cloud
Businesses are given a competitive advantage by cloud technology, enabling them to compete in a bigger market. Organizations are constantly looking for ways to increase productivity, carry out tasks more rapidly while maintaining accuracy and economy. It saves time and labor and considerably lowers high investment. It plays a crucial part in assisting businesses in achieving their goals because it is a technology that benefits them.
Let’s skim through the value-driven outcomes for various Lines of Business:
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Finance:
➔ 50% decrease in implementation cost.
➔ $2 Million saved by reducing duplicate purchase order.
➔ Increased transparency into financial processes between management and the finance department.
➔ 60% Reduction in time needed to close monthly accounts.
➔ 75% Time reduction to consolidate financial statements.
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Human Resource:
➔ Simplified landscape transformation supported by standard tools.
➔ Easier migration by using standard migration objects.
➔ Increased investment protection.
➔ Continuation of Fiori 2.0 apps for self-services in SAP S/4HANA.
➔ HR Professional role combines SAP Fiori with existing WDA-Services introduced by HR Renewal.
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Sales:
➔ 50% Increase in sales management efficiency.
➔ 7 times increase in order processing capacity.
➔ 44% Faster order lead times.
➔ 30 days or less for delivery of initial scope.
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Sourcing and procurement:
➔ 60% Automation of purchasing processes for required materials.
➔ 75% reduction in paper-based quality controls.
➔ 5%–8% drop in the cost of equipment maintenance.
➔ 80% less time and effort to onboard new customers in the services portal.
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Supply chain:
➔ A 15-fold inventory turnover – three times the industry average.
➔ Reduced the proportion of dead inventory to 0.05%.
➔ Lowered the cost of land transport by 13% and rail transport by 6%.
➔ 35% faster and more accurate transportation planning.
➔ >85% time reduction in generating logistics information.
➔ >75% increase in efficiency across transportation management.
SAP S/4HANA Cloud 2302: Highlights
SAP CoPilot: A virtual assistant that can adjust to the user and their function by employing artificial intelligence.
SAP Predictive Analytics: It is an analysis tool that can forecast the outcomes of specific actions, can be customized to the demands and application areas of the user in the form of separate apps.
SAP Build Process Automation: It contains workflow management, RPA capabilities, effective transition, process visibility, and embedded AI capabilities are all combined into one simple low-code experience.
Overview App: The new “Worker Overview” app completely redesigns how workforce data is presented in SAP S/4HANA Cloud’s public edition, you gain from better performance and search functionality.
SAP S/4HANA supply chain software: It enables an efficient material flow throughout all inbound and outbound logistics operations.
API’s and released objects: For development projects, S/4HANA Cloud public edition 2302, offers 4700 APIs and 300 released objects.
Teams App integration: Collaborative Cloud ERP leverages a new option “Share as Chat” as a part of Microsoft Teams integration.
Business process innovation: new business process which has been launched for Engineer to Order (ETO) to fulfil the needs of sales order-based projects.
SAP Fiori app: It is used for capacity planning and scheduling for the manufacturing industry a new feature of Capacity Evaluation.
GRC business content hub: It is integrated for business content providers for developing their own business content.
Order cost: The new feature in the project cost report is to display the project order cost.
SAP CPQ Integration: With the out-of-box integration to SAP CPQ (Configure Price Quote) the generation of solution quotes and development of complex product configuration becomes more efficient.
Final Thought
KaarTech has more than 17+ years of expertise in SAP services and solutions. As an SAP Gold Partner with extensive experience in implementing SAP solutions across various industries, KaarTech has demonstrated its ability to deliver 65+ SAP S/4HANA implementations for 300+ happy customers.
Our team of Digital Transformation Consultants who own decades of experience in handling numerous transformation projects are here to guide you by conducting various assessments and help you choose the right transformation path.
You can also gain the best inputs from our transformation accelerator KTern.AI, a KaarTech product; designed to help organizations achieve successful SAP S/4HANA implementations by leveraging the power of AI and automation which helps in 10% improved Productivity, 35% reduction in effort.
Want to know more about KaarTech and its products, Check out at the website KaarTech.
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