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Understanding ERP Legacy System Integration

Iyappan Perumal
June 21, 2024 |
ERP legacy system integration

Old is not always gold — especially when it comes to tech. Case in point: your legacy systems. They may have served your business pretty well for decades. But as they get outdated, and with more efficient solutions in the market, they may be slowing you down

Understandably, you may not want to throw away these legacy systems, which have helped you through so many phases of business. The point is, there is no need to discard these systems; rather, update them. This does not necessarily mean replacing what exists but enhancing it with ERP legacy system integration.

When Should You Upgrade Your Legacy System?

The following drawbacks are the signs to update those outdated technologies: 

Security Concerns are Rising

Cybersecurity is a major concern for business owners today, and with good reason. No company can afford to risk its sensitive data. Even if your legacy system receives regular patches and updates, they might not be sufficient to fend off the sophisticated tools used by modern cybercriminals. If security is a concern, it’s time to think about upgrading.

Performance is Slowing You Down

Slow or poor system performance can drag down productivity and disrupt your business operations. If your legacy systems are struggling to meet your performance needs, modernization could be the answer.

Poor Support and Updates

When the manufacturer stops supporting or updating an older system, it becomes very challenging to keep running smoothly. If your system hasn’t had servicing or updates recently, then this is a sure sign that you need to consider upgrading. 

Compatibility Issues are Emerging

Legacy systems are usually incompatible with newer technologies; hence, integration is always a solution. There are various issues related to data consistency and operational efficiency, not forgetting the security vulnerabilities. If your legacy software can’t connect seamlessly with your modern IT environment, then it’s time for an update. 

Communication Gaps are Appearing

If some departments are using legacy systems while others have upgraded, communication gaps can occur. This can hinder collaboration and business intelligence sharing. If your legacy systems are creating silos and restricting cross-departmental communication, modernization is needed.

Business Growth is Stagnant

Are you struggling to keep or gain a competitive edge? Legacy systems can limit your business’s growth potential by restricting agility, scalability, and the ability to seize new opportunities. If your systems are holding your business back, it’s crucial to modernize and unlock your full potential.

Maintenance Costs are Rising

The older legacy systems become, the harder it is to find expertise for their maintenance, and it comes at an increasing cost. In case the costs for maintaining your legacy system are high, that is a sure sign that an upgrade should be in the way. Over time, lack of service staff may be the cause of systems failure.

Compliance is Becoming Difficult

Such legacy systems cannot sustain their pace if your industry has stringent regulatory requirements. A fall in compliance exposes an organization to legal and financial risks and may lead to loss of reputation. Upgrading your systems will help remain compliant with changing regulations.

Also read: Top 13 ERP Integration Tools & Platforms (Reviewed) 

How to Connect Your ERP Legacy System

There are three main approaches to connect an ERP with your legacy system: 

Point-to-Point Integration

This involves line-to-line interconnection between two applications with customized code. There are no third-party applications or software involved in the process.

Use Case: In a point-to-point integration, if there is a single integration and your team members lacks expertise in other integration methods then this will be the right case for it. 

Limitations: Not ideal for multiple integrations; it is complex and requires heavy maintenance. The infrastructural setup involved in this approach is huge, especially when the systems are on-premises. In addition, such integrations are expensive and time-consuming to maintain since every change or update is a manual affair.

Enterprise Service Bus (ESB)

An ESB is a centralized software component that integrates multiple applications into a single ecosystem. It enables information flow by sending messages to a queue where applications are subsequently registered to receive the said data in a format they can understand. If an application goes down, the ESB saves the message and delivers it when the app is available.

Use Case: For integration of several internal systems, this works best with those that involve high data volumes.

Limitations: Most of the time, ESBs are deployed on-premises while this is absolutely not tailored for microservices architectures. It could crash in busy environments since it doesn’t support load balancing. They also best fit with internal systems, not with third-party applications.

Integration Platform as a Service (iPaaS):

iPaaS is a cloud integration appliance of that type, which helps in developing and managing several integrations with ease. It is integrated with predefined adapters, connectors, APIs, or even ESBs.

Use Case: Ideal for multiple integrations, iPaaS handles all legacy infrastructure needs, reducing the requirement for a large tech team. It’s especially effective if your legacy system offers an API. 

Benefits: iPaaS solutions simplify the integration process with their pre-built tools and cloud-based nature, providing real-time data synchronization and movement. They are managed by third-party providers, which means ongoing maintenance and updates are handled externally.

Also read: Top 15 iPaaS Solutions & Platforms for Distributors 2024

Benefits of ERP Legacy System Integration

Here are a few reasons why you should consider this integration

Increased Efficiency

  • Modernization: Very often, legacy systems are incapable of supporting the latest technologies, thus reducing efficiency. This clearly states that the integration with an ERP system makes the software applications modern in nature, improving operational efficiency in general. 
  • Automation: It eliminates manual effort spent on data transfer and other repeated activities. Automated operations save a lot of time, reduce errors, and make business processes smoother. 

Better Decision Making

  • Data utilization: You will be able to unlock vast volumes of data collected over the years by updating your legacy system and integrating it with modern software. It is analyzed to recognize patterns and derive insight in improving strategic decision-making.
  • Comprehensive View: The integration of all historical data and usage of the existing reports, intelligence, and customer data will give a holistic view. This comprehensive perspective will be helpful in refocusing strategies aimed at attracting new customers and retaining them.

Enhanced User Experience

  • Improved Performance: After integration, your system will perform better, eliminating issues like system hang-ups and delays. Linking legacy systems with modern solutions ensures smooth daily operations.  
  • Real-Time Information: For example, integrating an old inventory system with BigCommerce provides customers with real-time and accurate product information and prices, enhancing their customer experience. 
  • Ease of Adaptation: The learning curve for users is minimal, as they continue using the familiar system with added features. This seamless adaptation improves user satisfaction and keeps your business competitive by meeting modern expectations while maintaining trusted legacy systems.

Also read: Top 13 ERP Integration Tools & Platforms (Reviewed) 

Step-by-Step Guide to ERP Legacy System Integration

1. Identify the Requirements

First, write down all the integration requirements. Determine what is expected of integration: transfer direction, data in both sides, which database calls are essential, and data transformation processes.

Discuss these with your team and the other stakeholders who will interact with the system and come to an agreement regarding the objectives for such integration.

Clearly point out what you want to achieve through ERP integration, so that everyone is on the same page.

2. Assess Legacy System Capabilities

Review the architecture, code, and user experience to find out what your legacy system is and is not capable of doing.

If needed, seek technical assistance to accurately assess the system’s potential for integration.

Determine whether you can build a custom API (Application Programming Interfaces) quickly or if the integration challenges require system modernization before proceeding. Identify potential obstacles and assess the feasibility of integration.

3. Research Potential Resources and Solution Providers

Search for a potential Integration Platform as a Service iPaaS provider; this can often turn out to be the most secure and efficient way of integration.

The platform provided by the iPaaS should be agile, flexible, and cost-effective. Check their portfolio and past performance with similar systems.

Check their reviews and feedback from their previous customers. This provides an understanding of the reliability of the provider and their support capabilities. Ensure they provide ongoing maintenance and customer care.

4. Choosing the Type of Integration

Based on your assessment and study, choose what kind of integration will be needed—be it a custom API, iPaaS, data access layer, or a mix.

Now that you have a clear understanding of what exactly your requirements are and what is the best method to integrate for you, go ahead and implement the same keeping the resources and necessary support ready.

5. Testing and Launch

Test that integration works as expected and covers all requirements. It should also perform well under expected loads.

Prepare a strategy for further quality and security testing. Make sure all points in your checklist are covered before finally locking down the integration. Finally, update the integration roadmap to include how and when future updates and additional integrations will be conducted.

Using the following best practices will help you effectively combine traditional core systems with your ERP, ensuring a smooth transition and optimum performance.

Also read: 25 Best SaaS Integration Software 2024 [+ Pros & Cons]

Best iPaaS to Connect an ERP with Your Legacy System – DCKAP Integrator

Now that you’re ready to integrate your legacy applications with an ERP, and you know that an iPaaS solution is the right way to connect them, it’s time to find the best option for your business. If you are a manufacturer or distributor, the DCKAP Integrator is an excellent choice.

Why Choose DCKAP Integrator?

  • DCKAP Integrator is specifically designed for Manufacturers and Distributors to meet the unique needs of B2B businesses, making it an ideal solution for manufacturers and distributors. Plus, it has hands-on experience with numerous successful projects. 
  • It is a low-code solution. You can implement integrations in just a few hours with minimal to no coding required. This makes it accessible even if you lack internal technical expertise.
  • The DCKAP Integrator team handles all maintenance, freeing you from need to manage ongoing technical upkeep.
  • DCKAP Integrator works with legacy programming languages and data formats, transforming them into formats that modern systems can understand.
  • It also addresses compliance needs, ensuring your integrations meet relevant safety and regulatory standards. 
  • DCKAP Integrator allows you to integrate both for the cloud applications and on-premises, building best-in-class solutions that connect different applications seamlessly.
  • It is easy to get started with. You can quickly see a demo and interactive product review by visiting their website.
  • The support team is highly proactive and available to assist you whenever needed, ensuring a smooth integration process. 

Let us help you with those common challenges and provide you with successful integration. Reach out to us for your legacy ERP integration project

FAQs

What is legacy system integration and why is it important to update for organizations?

Legacy system integration involves connecting and merging older, often outdated systems with newer systems or technologies such as cloud computing and big data analytics. It’s crucial for organizations aiming to leverage modern capabilities while maximizing the value of existing investments in legacy systems.

How does data migration play a crucial role in legacy system integration?

Data migration is essential in legacy system integration as it involves transferring data from outdated systems to new systems or cloud environments. It ensures that data quality, integrity, and security are maintained throughout the integration process.

What key challenges of legacy system integration do organizations face?

Organizations often encounter challenges such as disparate data structures, differing user interfaces, and the need for extensive manual work to align data sources and formats. Additionally, integrating different technologies and specific needs can complicate the process.

How do you integrate with critical but legacy systems?

Integrating with critical but legacy systems requires careful planning and execution. Organizations typically use middleware, APIs (Application Programming Interfaces), or custom integration solutions to bridge the gap between legacy systems and modern applications. This ensures seamless data exchange and functionality across integrated applications.  

Why would anyone care about upgrading legacy systems that are doing okay?

Whereas some institutions consider them to be holding up well, legacy systems have no support for new technologies, increasing security concerns around data of value, and take away from the practice of digital transformation. This ultimately results in improved performance and security, besides adding scalability while infusing new technologies to answer evolving business needs.

How does Service-Oriented Architecture support legacy system integration?

SOA provides flexibility in the framework that will help in smooth integration with legacy systems and new applications or services. This makes data integration easier, reuses services, and scales to global IPaaS market demands.

What are the benefits of integrating CRM applications into legacy systems?

Integrating CRM applications enhances customer data management, improves data quality, and enables personalized customer interactions, leveraging the capabilities of both legacy and modern systems. 

How to update a legacy ERP system?

Here are a few efficient ways you can get started:

  • Current System Functionalities Analysis: Identify gaps and assess business needs against requirements for new functionality.
  • Modern Software Solutions: Select modern ERP software that aligns with the needs of the organization in supporting goals for digital changes.
  • Integration into a Data Warehouse: The transfer of data to a centralized data warehouse for easy access and analysis from the legacy system.
  • Security Enhancement: The updated security protocols attenuate risks associated with outdated systems.
  • Alternative Approach: Phased migration or hybrid solutions that will help incrementally move from the legacy to the modern ERP without disrupting daily operations.
Iyappan Perumal

As the Head of Product for DCKAP Integrator, an ERP Integration Platform for distributors - Iyappan leads the product vision, strategy, and execution for delivering scalable, secure, and user-friendly integration solutions for small to mid-size distributors. With over a decade of experience in building eCommerce stores prior to kick-starting his product journey, he knows the ins & outs of scaling & managing the storefronts. Out of curiosity, he started figuring out solutions to streamline the front-end and back-end operations that help distributors run an effective & profitable distribution business. And ended up launching Cloras (now DCKAP Integrator) in 2017. Today, hundreds of distributors across different verticals use DCKAP Integrator to connect & automate their backend operations. He loves documenting his observations and learnings, while staying up-to-date with the goings on of the industry.

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