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Your Old ERP vs. A New ERP 

What is Legacy ERP?

The name Legacy¯ was coined by the analyst firm Gartner to describe an aging, cumbersome form of data processing for business's. Legacy ERP became popular in the 1990ā€™s in hopes of a better business application integration platform than what was previously available. The industry has seen a boom, reeling in billions of dollars every year for the last 15 years, all at the expense of corporations. Lengthy contracts that guaranteed servicing and updates for hardware and software kept Corporations tied up spending 10xā€™s what they did for initial introduction to the system. They are described as arthritic, an extremely hectic and continually frustrating process for businesses.

What is the Cloud?

As Amy Poehler portrayed in her Best Buy spot a couple years ago, what is the cloud¯, are we in the cloud¯, where is it? are common sentiments of the greater public. In layman's terms, the cloud is simply a reference to accessing information and business processes through the Internet. It is not about hardware, the aspect that was critical to Legacy ERP; no local storage occurs. Saas or Software as a service is a tool that providers sell to their customers incrementally and as desired so that they have access to business programs through the Internet. The argument for Cloud computing is flexibility; cost effectiveness and growth opportunities...all to be explained soon.

Why the Cloud excels in the Business world

Timeliness: The software and process's in SaaS are configured and applicable almost instantaneously. After a minor setup process, a business can have unfettered access in a couple of hours. This significantly reduces set up time and software updates. All updates can be done remotely from the central provider and without interrupting business activity. This greatly contrasts legacy ERP that requires an extensive initial set up and even more frustrating updates and maintenance.

Scalability and Integration: In the traditional Legacy¯ environment, if a company wanted to expand it's business applications and processing, they would go through an expensive process to update. On top of that, a company would have to budget how much computing power they would need going forward. If it were too little, they would be missing out on potential increase in enterprise value. If it were too much, they would be paying more than necessary and drag down company efficiency. With the cloud, SaaS providers can provide streamlined and very specific amounts of data to their clients without huge costs and misjudged systems requirements. And if they need more, they can quickly update their systems to access more computing power.

Cost effectiveness: One of the strongest arguments for SaaS is its cost saving methods. As described above, Legacy ERP requires a lengthy set up process and a large staff that translates to a huge expense. When a company decides to set up the Legacy, they would spend a fortune not only installing all the hardware but also paying for upgrades as their business grows. They were often forced to hire their own IT staff to manage the complex systems or hire it out to a private company that charged exorbitant prices. When a business hires some one like Tekoa ERP, a rapidly expanding SaaS business, they become part of a multitenant community where all hardware and software costs are split between members and results in lower costs. Split costs as well as a professional team whose sole purpose is to provide an effective business solution makes for a preferable computing experience.

Accessibility: Another incredible aspect about cloud computing and SaaS is the availability to a wider variety of clients with smaller market caps. Typically, higher instillations costs and a general lack off access to Legacy ERP has kept small to mid-sized business's out of preferable software programs. With SaaS ERP, they now have the option to buy in to an effective system that won't sink their business and allow them to increase efficiency. 

What's the Catch? 

There are still defectors from the Cloud revolution. Because cloud computing's effectiveness depends on the Internet connectivity, questions arise about reliability. One big question mark is whether or not there is enough bandwidth to compete with Legacy as groups like Salesforce rapidly expand. This however, is the responsibility of the provider; they must be up to date and any lag or crash is legally on them. To date, no major issue has arisen and many proponents point to the growing investment in technology that improves Internet speed. It is also important to note that no official governing body exists that regulates the wild west known as the Internet, issues like property rights are another issue that will soon be addressed. 

All aboard the Cloud Train! 

A number of critical reasons have been presented with the purpose of persuading business owners. In the United States, we have a friendly business start up environment but it does not guarantee success. In an increasingly global market, competition is fierce and if your company is being weighed down by internal costs it may be time to update your business application access. As a small business you already pay exorbitant taxes, why pay so much for the tools that help you succeed?  

By: Patrick Bannworth 

TEKOA ERP Software 

Web Portal Software

More Resources 

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ERP for Midsize Business 

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ERP for Manufacturing




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