Manufacturing software has evolved far beyond the capabilities of legacy ERP and accounting systems with the gradual adoption of digital transformation and cloud solutions. Whether in a public SaaS (Software as a Service), private or hybrid cloud-based environment, manufacturers gain access to multiple benefits when migrating to modern, digitized applications. These include improved scalability, cost consolidation, integration with third-party apps, streamlined operations, real-time insight and communication, and the ability to future-proof your technology stack for sudden changes in the market.
Here are the top differences to keep in mind when comparing legacy ERP and cloud software for manufacturing:
What is a Legacy Manufacturing ERP?
When software is referred to as being “legacy,” that means generally that it is older as well as carries the implication that it is becoming or has become outdated due to its age and situational developments in the field (technology advancements, bugs in the coding, etc.). A key factor to this designation is also the assumption that the system is still in use in the market and that those users are at risk of facing challenges from the application aging out, with varying degrees of severity for themselves as well as others if there are network security concerns present.
Legacy manufacturing ERP refers to a more specific category of software that provides manufacturers with combined financial and operational visibility across their production and distribution chain, but is also aging past remaining a viable solution. Enterprise Resource Planning systems are typically built on a core accounting and bookkeeping platform, and integrate this functionality with features that provide value for supply chain management and traceability needs, such as raw material processing records or inventory tracking.
Cloud Revolution – Manufacturing ERP and Accounting Software
Most applications serving the manufacturing industry – ERP included – have historically been on-premise, meaning they are loaded in from an onsite server. The widespread of the cloud, however, is changing all of that as an increasing number of businesses have taken advantage of the technology to digitally transform their processes and workflows. There are many benefits to migrating to a cloud-based infrastructure for manufacturers:
- More flexibility in software deployment and use
- Easier scalability for deployment and expansion
- Cost reductions from eliminating hardware
- Turning CapEx costs into OpEx
- Faster and more seamless access to upgrades
- Real-time visibility into all locations
- Easier access to data across the user base
- More up-to-date and centralized security controls at the admin level
Legacy ERP vs Cloud Manufacturing Software
Comparing your legacy ERP against a modern cloud platform as a manufacturer means asking vital questions about what your processes and cost look like now, and what are your goals for the future. The only real benefit of holding onto an aging solution is the stability – which will not last as there is a valid it is being overtaken by newer applications. Besides the extremely serious cybersecurity concerns that appear with increasing frequency in older software, you are also at risk of factors like your application breaking down to customizations, integrations with new technologies not working, and being outpaced by competitors who are using better platforms to accelerate ahead.
Examples of Legacy ERP
Here are a few examples of legacy ERP still in use in manufacturing, and the downsides of continuing to rely on them:
Microsoft Dynamics – SL, GP, AX and NAV
The Microsoft Dynamics family of solutions is a collection of two ecosystems currently – accounting systems acquired by Microsoft over time that were rebranded, and the more modern Microsoft Dynamics 365 suite of ERP and CRM solutions. The opaqueness of Microsoft’s messaging on the roadmap from the former to the latter has undoubtedly contributed to many users choosing to remain on Microsoft Dynamics SL, Microsoft Dynamics GP, Microsoft Dynamics AX and Microsoft Dynamics NAV instead of migrating to Microsoft Dynamics 365 Business Central or Microsoft Dynamics Finance and Operations. Each of these applications is either approaching or already passed its “sunset” date, meaning that it will receive no significant new updates and will eventually cease being supported.
Microsoft Dynamics SL
As of 2024, Microsoft Dynamics SL has reached end of life (EOL) and all support will stop, meaning that users are at risk if their software deployment breaks down or their network is breached.
SAP B1
SAP B1 (Business One) is a formerly on-premise ERP that was migrated to the cloud by its publisher in order to introduce a SMB option for their new cloud-based portfolio. However, its legacy architecture remains and has been noted to cause issues with integrations as noted in user reviews, and feedback from manufacturers indicates that it does not provide enough features to justify its pricing.
Sage X3
Sage X3 is an ERP focused on manufacturing and distribution functionality, with robust supply chain management capabilities; however, it is also an older on-premise system that lacks true cloud functionality. Its aging architecture and lack of more modern features on the financial visibility side limits its scalability.
Examples of Cloud Manufacturing ERP and Accounting Software
Here are a couple of examples of modern cloud-based ERP and accounting software systems available for manufacturers, and their immediate benefits:
Sage Intacct
Sage Intacct is a scalable and robust accounting software with enterprise-grade financial management features, built on a native cloud platform. With an advanced SaaS architecture, AI-powered automation, multidimensional reporting, real-time visibility and an ecosystem of over 300 integration partners, this modern web-based solution enables you to capture a virtually unlimited level of insight into your finances. Additionally, it comes with native inventory management, order management, and procurement workflows that connect seamlessly with your manufacturing processes and financial dashboards.
Sage for Distribution and Manufacturing Operations
A core strength of Sage Intacct is its ability to seamlessly connect with a wide range of add-ons, both best-of-breed third-party solutions like Salesforce and additional plugins like Sage Intacct Construction. One such module is the Sage Distribution and Manufacturing Operations (SDMO) app, which turns Sage Intacct into a true production and supply chain management solution for manufacturers.
Features added by SDMO for Sage Intacct include:
- Production tracking
- Purchase order automation
- Requisition management
- Stock management
- Material tracking
- Work order generation
- Sales order management
- Resource tracking
- Kit assembly
- Inventory valuation
Acumatica
Acumatica is a user-centric cloud ERP that bridges the gap between financial and operational data silos in a modular, scalable architecture available in multiple cloud deployment models. With various connected modules available and a unique, usage-based pricing structure, it enables you to tailor your software stack around your needs instead of changing your processes to fit your technology.
Acumatica Manufacturing Edition
The Acumatica Manufacturing Edition is a comprehensive suite tailored for manufacturers and that supports a wide range of industry-specific activities from MRP to engineering orders, and beyond. It offers a unified view of your production cycles and capacity, inventory levels, raw material stock and allocations, labor orders, customer data and more in a unified view that can be customized for each user.
Begin Your Migration from Legacy ERP to the Modern Cloud
Your legacy ERP did its job in the past, but continuing to rely on outdated software for your manufacturing financial and operational management not only puts you at increased risk of a data breach, but also of being outpaced by your competitors. Get in touch with the experts at SWK Technologies to get an in-depth review of your current technology stack and discover the best – and most cost-effective – options for migrating to a modern solution.
Contact SWK here and get started on your migration from legacy manufacturing ERP to a modern cloud platform built for your needs.