7 Reasons for Shifting Your Legacy ERP to the Cloud


At the heart of every business lies its Enterprise Resource Planning (ERP) system, serving as the backbone across all operations. A robust cloud-based ERP solution streamlines processes through intelligent automation and offers invaluable insights through Artificial Intelligence (AI) and Machine Learning (ML), fostering innovation in business models and beyond.

Cloud ERP, projected to skyrocket from $72,679.4 million in 2023 to an astounding $327,126.8 million by 2033, is more than just software; it’s a catalyst for efficiency and effectiveness. It is reshaping traditional processes to meet the demands of today’s dynamic world. 

What is Cloud ERP?

Cloud ERP revolutionizes traditional ERP systems by operating on a vendor’s cloud platform, accessible via the Internet. ERP software integrates crucial financial and operational functions, including inventory management, order processing, and supply chain oversight. It streamlines processes such as procurement, production, distribution, and fulfilment, consolidating data into a unified source. Unlike on-premises systems with hefty upfront costs, cloud ERP offers comparable or superior functionality without the financial burden.

At its core, cloud ERP serves as the IT backbone of an organization, providing robust support for essential business processes. It operates on a subscription basis, leveraging cloud computing technology freeing customers from hardware investments and maintenance concerns. The vendor assumes responsibility for application upkeep, upgrades, data storage, and security, empowering businesses to focus on growth and innovation. With real-time inventory management capabilities, cloud ERP allows businesses to effortlessly keep tabs on stock levels across multiple locations.

7 Reasons for Shifting Your Legacy ERP to the Cloud

  1. Continuous Innovation: ERP cloud systems stand as pillars of scalability and adaptability, empowering organizations to grow and swiftly embrace transformative changes. With the effortless integration of new processes and modules, businesses maintain a dynamic edge—crucial in today’s competitive landscape. Burdened by complexity, legacy systems often fail in the face of evolving company needs, holding them back from adopting new processes and innovations, thereby jeopardizing market prominence.
  2. Security: In terms of security, ERP cloud solutions guarantee a fortified environment. With seamless, automatic updates and cutting-edge security protocols, cloud ERP software mitigates the menace of security breaches and data infringements. Furthermore, it also includes data fortification features like automated data sanitization and adherence to stringent data privacy laws. Where legacy systems often lack contemporary security, modern cloud technology boasts robust encryption, multi-factor authentication, and strict security protocols, ensuring comprehensive protection. Hosting servers in secure, centralized facilities minimizes the risk of physical theft.
  3. Real-time Insights: Legacy ERP systems cannot often deliver real-time data due to integration complexities among subsystems, hindering accurate decision-making. With ERP cloud, access to real-time data empowers employees with timely insights, enabling agile decision-making and adaptive strategies in response to market shifts, thus bolstering competitive advantage. With regular data monitoring, ERP facilitates informed decisions on inventory levels and operational efficiency. Migrating ERP to the cloud also includes customized reporting, which further enhances organizational decision-making in dynamic business landscapes.
  4. Scalability: ERP software offers a versatile suite of applications catering to diverse business needs, from procurement to project management. While these applications can function independently, their integration within an ERP system facilitates seamless scalability and configuration within an organization. Operating on remote servers, cloud-based ERPs eliminate the hassle of expanding hardware infrastructure to accommodate increased user bases, locations, or subsidiaries. This scalability ensures that the ERP system grows in tandem with the business. Cloud vendors, equipped with data centers worldwide, ensure robust data redundancy and reliability, surpassing most in-house management capabilities. With a commitment to exceptional service availability, cloud software vendors aim for 99.999% uptime, ensuring minimal unplanned downtime for customers—showcasing their reliability and scalability prowess.
  5. Cost Reduction: With ERP cloud, organizations can shed the burdens of costly hardware investments, extensive customization, and intricate IT management. Hidden costs often plague legacy systems, including the necessity to upgrade servers and hardware, wasted time on slower, outdated systems, and the toll of poor user experience on staff productivity. In stark contrast, cloud-based ERP requires no hardware or servers and can be managed with a limited workforce due to continuous support and updates in the cloud. Additionally, cloud providers offer transparent pricing models and scalable subscriptions, significantly slashing the total for system maintenance and upgrade costs.
  6. Fast Implementation: Implementing a cloud ERP system offers a swift ramp-up compared to on-premises deployment. Unlike on-premises ERP, which entails upfront expenses for servers, database setup, initial implementation, consultants, IT personnel, security, and backups, cloud-based ERP solutions offer substantial cost reductions from the outset. Cloud ERP software providers take charge of hardware and software installations backed by dedicated experts in data center management. Moreover, a user-friendly interface facilitates rapid adoption, accelerating time to productivity and enabling businesses to capitalize on opportunities swiftly. Streamlined implementation is crucial for minimizing business downtime and accelerating time to value. Research indicates that approximately half of the businesses achieve their implementation goals within the projected time frame.
  7. Standardized Business Processes: Implementing cloud ERP software aims to leverage an organization’s best practices, fostering consistency to streamline operations and standardize workflows. This minimizes manual labor and human error, optimizing efficiency across the business. Integrating platforms like customer relationship management (CRM) into the ERP system further enhances cohesion. Focusing on standardization and setup not only saves money but also helps teams work together better, making the whole organization more effective.

Legacy vs. Cloud ERP: Why is Moving Legacy On-Prem ERP to Cloud Important?

1. Deployment and Management:

Legacy ERP (On-Premises):

  • Implemented and managed internally on company servers.
  • Requires internal or outsourced IT personnel for technology management, software upgrades, data backups, and IT support.

Cloud ERP:

  • Deployed and managed on the vendor’s servers, accessed via the Internet.
  • IT management responsibility shifts to the vendor, allowing internal staff to focus on core business functions.

2. Resource Optimization:

Legacy ERP:

  • Requires significant physical space, including servers and hardware.
  • Demands dedicated IT resources for ongoing support and maintenance.

Cloud ERP:

  • Minimizes physical space requirements as data is stored on the cloud.
  • Optimizes human resources by reducing the need for in-house IT staff for system management.

3. Vendor Interaction and Support:

Legacy ERP:

  • Software purchased upfront and managed independently by the business.
  • Some vendors offer maintenance packages with regular upgrades at an extra cost, but not universally provided.

Cloud ERP:

  • Includes regular upgrades in the cost through ongoing communication with the vendor.
  • More vendor interaction compared to on-premises solutions.

4. Upgrade and Maintenance:

Legacy ERP:

  • Businesses may opt out of maintenance packages, risking outdated systems.
  • Requires manual management of software updates and support.

Cloud ERP:

  • Regular upgrades are typically included, ensuring the system remains stable.
  • The vendor handles all updates and maintenance, ensuring smooth operation and reducing the risk of system obsolescence.

How Hexaware Can Help

Hexaware specializes in implementing leading cloud ERP products, offering flexible engagement models to suit your needs. Our proprietary platforms provide innovative solutions at every stage of your cloud migration journey. Whether you seek to maintain your current legacy SAP or Oracle applications while harnessing the benefits of the cloud, Hexaware has you covered. Partner with us to host your existing legacy ERPs on the cloud and unlock the aforementioned benefits.

With strategic partnerships with major hyperscalers, Hexaware is equipped to manage your complex ERP portfolio efficiently. Our cutting-edge AMS services cater to platforms like Workday, SAP Cloud, Oracle Cloud, and Adobe Cloud, delivering over 30% in benefits and cost savings.

As your trusted cloud migration partner, Hexaware guarantees a smooth transition to the public cloud through strong partnerships and a flexible package-based approach. Kickstart your cloud migration journey with a complimentary cloud readiness assessment, showcasing Hexaware’s commitment to seamless cloud transitions.

Discover how Hexaware can revolutionize your business with our comprehensive services tailored to help you transition to a SaaS model.

About the Author

Anantha Rangarajan

Anantha Rangarajan

Oracle Expert

With over 25 years of experience in ERP, Anantha Rangarajan is a technology and business leader at Hexaware Technologies. His expertise encompasses managing large, complex ERP transformation engagements involving cross-functional, multi-geography teams. Anantha's proficiency spans diverse business processes, aiding customers in cloud migrations and enhancing business outcomes. Passionate about solving customer problems and enriching customer experience, he is a key figure in driving successful ERP transformations and technological advancements within the company. 

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