ERP-application

Why German companies are modernizing their legacy systems

Many companies in Germany are faced with the challenge of modernizing their ERP applications while at the same time making complex IT environments easier to manage. A recent survey by Boomi has examined the reasons for the increase in investment in new systems.

New survey: German companies invest more in modernizing legacy ERP systems than in maintenance
On-premise ERP applications are increasingly being replaced by cloud-based systems.
The modernisation of ERP systems enables innovations in the business model.

In the past, many companies used their IT budgets for the maintenance of outdated systems, but now they invest significantly more in modern ERP applications. 35 and 33 percent of the companies surveyed by Boomi stated that they were using their budgets to modernize their ERP systems and also for innovations. Expenditure on maintaining outdated systems has been reduced from 70 percent to 80 percent to around 34 percent.

Focus on modernization of ERP systems and cloud migration

According to the Boomi survey, 63 percent of German companies are increasingly focusing on modernizing older ERP applications and migrating them to the cloud to enable strategic growth (48 percent). In the course of the digital transformation, however, German companies have a differentiated view of ERP applications.

This ranges from the fear that enterprise resource planning is too complex for modernization to the assessment that the migration of applications to the cloud offers opportunities. For proponents, the advantages are obvious: in addition to ensuring system availability, performance and security (56 percent), respondents hope for stronger business growth (49 percent) and improved IT flexibility (49 percent).

"It is clear that investment in application modernization and digital business innovation is on the rise. Executives and IT decision-makers will soon see the benefits of these investments and will continue to reduce the cost of maintaining outdated technology," explains Stefan Soerensen, Account Executive at Boomi.

ERP applications: Costly process of modernization

The survey also shows that decision-makers in European companies often face a dilemma: Either they invest in the costly and complex process of ERP modernization or they are overtaken by more innovative competitors. Companies must meet this challenge in order to achieve their core objectives. For German companies, 57 percent of the objectives are to create the best possible customer experience, 49 percent to integrate all applications and 43 percent to achieve IT agility.

When asked how companies intend to achieve these goals, respondents cited the following measures:

Standardization and consolidation of applications: 76 percent
Migration of infrastructure to the cloud: 73 percent
Legacy infrastructure consolidation: 72 percent

Among the biggest challenges for 60 percent of respondents is the lack of integration technologies to access data from any device and data source, and for 42 percent the lack of experts with integration skills.

ERP applications: Complete Migration to the Cloud

German companies plan to master these challenges with iPaaS and solve specific use cases. Specifically, they are looking to scale APIs (22 percent), improve collaboration with business partners (22 percent) and synchronize data across the enterprise to improve business results. A full 57 percent of respondents believe that ERP implementations will be 100 percent in the cloud by 2021, replacing pure on-premise implementations.

"Companies are increasingly recognizing the potential that cloud-based applications offer them. They are investing in strategic growth initiatives like ERP, CRM or iPaaS. ERP modernization is also accompanied by integration modernization, and Boomi gives customers a future-proof platform for their development," comments Stefan Soerensen.

Boomi, a Dell Technologies company, unifies all processes in the digital environment to help companies achieve better business results. Boomi's intelligent and scalable cloud platform accelerates business results by connecting data, systems, applications, processes and people. (sg)

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