The hidden costs of legacy systems: why mid-market supply chains need modernising in 2025 and beyond
Mid-market supply chain companies worldwide lack the resources to thrive and adapt in today's fast-paced digital world. Despite this, 97% of supply chain professionals recognise the urgent need to modernise their IT infrastructure, acknowledging that the current systems are inadequate for meeting the needs of modern supply chains. With many companies still relying on legacy technology, some of which are over 20 years old, integration issues are profoundly prominent for both suppliers and customers – this needs to change.
In an era where disruptions like port strikes or labour shortages are becoming increasingly more pervasive, heavy reliance on manual systems is no longer sufficient for effective supply chain management and business continuity. Consequently, transformative solutions have been in greater demand, including enterprise resource planning (ERP) modernisation, shopfloor automation, and warehouse automation solutions.
Embracing these advancements has become necessary for mid-market companies wishing to remain resilient and competitive amid evolving challenges within the industry.
The creation of disparate systems
Without the bespoke advancements that modern technology brings, legacy methods create disparate systems brought on by tools reliant on manual processes. These challenges include the following:
Operational inefficiencies: Legacy ERP and customer relationship management (CRM) tools require manually inputting, storing and extracting data in systems like Excel spreads, increasing the risk of human error. Additionally, this dependency demands significant time and effort to maintain and keep track of such data.
Maintenance costs: Legacy systems are expensive, making them cost burdens to mid-market companies. Additionally, legacy systems are often difficult to repair due to a lack of resources available.
Security risks: Regular software updates are integral for supply chains to run smoothly. With this in mind, mid-market companies that use legacy systems are much more vulnerable to cyber attacks, data breaches and other security threats because the systems cannot support new updates.
Scalability Issues: As complex, modern digital operations grow, legacy systems often struggle to adapt to new technologies. This means mid-market companies are more likely to fall behind competitors due to incompatibility and inflexibility issues, which can lead to missed opportunities.
Limited visibility: Real-time visibility is key to ensuring smooth logistics and warehouse management operations. Unlike modern technology, legacy technology is unable to provide visibility on operations, meaning issues like delays and inventor discrepancies are likely to occur.
Building resilient supply chains
Mid-market supply chain companies that still run core processes on siloed, legacy systems lack the clear, structured foundation essential for effective digitisation. Building innovative, resilient supply chains requires a shift to intelligent workflows powered by artificial intelligence (AI) and machine learning (ML). These solutions have the potential to predict demand and supply needs while also automating workflow efficiency.
Modern advanced solutions: seamless collaboration
The first step in moving from a fragmented, transactional set of systems to proven, modern advanced solutions is through the seamless integration of automation technologies directly into core systems like ERP. These tools revolutionise operations by improving collaboration across the supply chain, ensuring a unified way of working, and alleviating any supply chain issues by strategically upgrading or replacing legacy systems. Other benefits include the following:
Enhanced handling: Intelligent solutions empower warehouse management teams to handle all inbound logistics efficiently. This includes the inward transfer of materials from external suppliers, internal transfers or customer returns, and unit handling.
Scalable cloud infrastructure: Cloud platforms are preferred for ambitious mid-market organisations because they are a highly scalable and modular approach that supports growth. Instead of engaging in complex capability expansion projects, cloud-based solutions allow businesses to adjust capacity based on their needs.
Optimised production: A manufacturing execution system (MES) supports efficient, more transparent production management, quickly resolving quality and productivity issues while reducing warranty and liability risk.
AI: driving operational efficiency
Additionally, implementing AI-driven technologies such as automated bots and operational assisting mechanisms can transform supply chain management. The benefit of adopting such technology is that it reduces errors, improves scalability and enhances operational speed due to a reduction in manual intervention. These tools can help streamline workflows and reduce manual intervention, helping mid-market companies improve productivity without requiring substantial upfront costs. Overall, this makes the transition from legacy systems to modern technology and intelligent workflows impactful and cost-effective.
With this approach, mid-market companies can modernise their systems, ensuring AI capabilities are bundled directly into core ERP and CRM packages, allowing them to face evolving challenges head-on.
