Navigating the transformation from legacy to modern ERP systems

According to the CPA Australia Business Technology Report 2023 , 69% of Australian businesses have a digital transformation strategy in place. Organisations with more than 500 employees listed ‘complex legacy systems’ as their top challenge to technology adoption.

ERP software is critical to an enterprise of any scale and is a common term for software that manages a multitude of business functions. These systems are designed to help a business run, manage and automate a range of diverse processes across human resources, manufacturing, supply chain, distribution, finance and procurement – to name a few.??

Legacy ERP systems are among the platforms hindering digital transformation. They often cannot scale with changing needs, rely on older, incompatible technology, and require manual processes to manage. Conversely, modern ERP systems exist in the cloud and are designed to provide scalability, connect team members to the right data at the right time, and integrate with other workforce management platforms. If you are planning to modernise your ERP system – either through replacement or supplementing new software to complement it – here are some points of guidance.

Analyse your current ERP system

The transformation to a modern ERP system begins with thoroughly evaluating the existing system. You must understand its strengths, weaknesses, data structures, and integration points. A detailed audit can reveal the extent of customisation required and potential modernisation challenges. This initial assessment also provides insights into what the new system should address and helps your organisation plan the migration.

Your evaluation should also identify the specific business processes affected by the transformation. Mapping out these processes and their interdependencies ensures that new ERP capabilities or systems will support all necessary functions. This step helps you avoid disruptions in daily operations and ensures that the new system aligns with the company’s long-term objectives. It sets the stage for a smoother transition and more effective system implementation.

Set transformation goals

Your organisation should map out clear objectives for the ERP transformation. The objectives should encompass the desired improvements in data accuracy, process efficiency, and overall business performance. Well-defined goals guide the migration process, decision-making and resource allocation. They help ensure all stakeholders remain aligned and focused on achieving the same outcomes.

In addition to outlining the technical and operational goals, it’s important to consider the strategic implications of the ERP transformation. How will the new system support business growth? How will it help the organisation prepare for future market changes ? Aligning the migration objectives with the broader business strategy can maximise the return on investment and support long-term success.

Establish a budget and roadmap

Budgets and timelines reduce unexpected costs and delays during the ERP transformation. Creating a realistic implementation timeline involves setting costs, milestones and deadlines for each transformation phase. Your organisation should plan for potential challenges and delays to accommodate unforeseen issues. Timelines keep the project on track and ensure all stakeholders understand their responsibilities throughout the migration process.

Plan a data migration

Data migration is perhaps the most complex part of an ERP transformation. Ensuring data integrity and consistency in the new system involves cleansing and standardising data to meet its requirements. This step prevents data discrepancies that could disrupt business operations and compromise decision-making.

Data migration also involves planning for data transfer processes and implementing data validation techniques. Your organisation can maintain a seamless flow of information by carefully managing historical data migration and integrating it with real-time data streams. Once complete, the new ERP system will operate with accurate and up-to-date data from the outset.

Balance standardisation and customisation

Balancing standardisation and customisation can impact the success of the ERP system. Customisation tailors the system to your organisation’s unique needs, but excessive customisations can increase complexity and maintenance costs. On the other hand, standardisation simplifies integration and future upgrades, making the system easier to manage.

To achieve this balance, your organisation should assess its specific requirements and determine which aspects of the ERP system need customisation. Your business can optimise its ERP system’s performance by standardising core functions while only completing necessary customisations.?

Complete testing and quality assurance

Comprehensive testing identifies issues before the ERP system goes live. This process includes unit testing to verify individual components, integration testing to ensure different system parts communicate properly, and user experience testing to confirm that the system meets all functional requirements. Thorough testing prevents disruptions in business operations and ensures the new system performs as expected.

Quality assurance does not end with initial testing. Ongoing monitoring and feedback identify and address any post-implementation issues. Your organisation should also have a strategy for applying regular updates and patches. This continuous improvement cycle ensures that the ERP system evolves with the business and maintains performance over time.

Develop a change management strategy

Without good change management, your team may struggle to immediately see the benefits of modern ERP systems. You should prepare and support relevant team members by clearly communicating changes and providing training programs. By engaging stakeholders early and continuously, your organisation can mitigate resistance to change and ensure that users feel well-prepared to adopt the new system.

Continuous support during and after the implementation phase promptly addresses any issues and reinforces the new processes and systems. Providing support during change management fosters a positive transition experience and helps teams maximise the benefits of the new ERP system.

Conclusion

Migrating from a legacy ERP system to a modern solution can enhance your organisation’s efficiency, decision-making and competitiveness. Your organisation can successfully navigate this transformation by following a structured approach and addressing key factors such as data migration, customisation, and change management.?

Tambla can guide your transformation to modern ERP systems

At Tambla, we specialise in HR transformation for large organisations with modern ERP systems. Our tailored solutions streamline operations, improve employee experience, and enable your business to make informed decisions quickly and efficiently.

If you are looking to improve the HR technology components of your ERP platform, let Tambla assist you. We offer comprehensive services, from system deployment to managed solutions, ensuring efficient and reliable software to meet your business needs. Visit our Enterprise HR & HCM Solutions page for more information.