Article

Modernising Legacy Supply Chain Systems Requires a Platform-based Approach

By Craig Sears-Black,
Modernising Legacy Supply Chain Systems Requires a Platform-based Approach

The pace of change in manufacturing, distribution and retailing has been increasingly rapid in the face of external challenges. Tough economic conditions have presented CIOs with an almost impossible task: transform the IT infrastructure to meet the business’s constantly evolving functional needs and organisational growth goals, but do so while staying within budget and remaining risk averse.

This challenge is made more complicated because so many companies are tied into big investments in legacy systems. These behemoths resist change and are so ingrained in the business that the prospect of modernising or replacing them can be daunting from an implementation effort standpoint and challenging from a cost justification perspective.

Reasons to modernise systems

There are however a number of compelling reasons why a business should consider upgrading its legacy systems.

The first is the high cost of maintaining legacy systems which includes the expense of supporting code in which a system has been written and developed. Many organisations are supported by systems that have been written and developed in fading languages (e.g. Cobol), and with a smaller and smaller pool of programmers that know these programming codes, many applications are becoming very expensive to maintain.

Next there are businesses that have grown through mergers or acquisitions. Typically in these types of organisation, there are huge, complex IT infrastructures with many disparate and loosely integrated systems. There is little standardisation and optimisation, the cost of maintaining such a web of systems is enormous and when new functionality is needed, a tremendous effort is required to add new functionality and get multiple systems working together.

Finally, in this new era of multi-channel commerce, companies are being forced to re-think their whole approach to the way they run their business operations. Most legacy systems are simply not built to deal with online trading let alone omni-channel commerce and the flexibility and scalability needed to support this.

Focus on modernising legacy supply chain systems

Whilst many companies have replaced their legacy systems managing processes such as finance, HR and manufacturing with an ERP system in the last 10 years, less attention has been given to replacing the legacy systems that manage supply chain processes. This has started to change. But why now and what exactly are organisations replacing their legacy supply chain systems with?

Timing

Companies have come to view their supply chain as a strategic asset and are employing their supply chain today as a competitive weapon and so the CIOs of such organisations are looking increasingly at upgrading their legacy supply chain systems. 

Replace legacy supply chain systems with what?

Most companies have traditionally relied on either: an assembly of supply chain solutions which is a disparate set of supply chain solutions that never fully leveraged each other; or a suite of supply chain solutions which is a set of related applications from a single vendor but built on disparate technologies and with limited cross-functional workflow capabilities. Migrating solutions in a suite to become solutions that share a common process platform (date, objects, workflows, common services, security etc) requires a significant investment of time and money that few vendors have been willing to make.

One vendor, Manhattan Associates, has made that investment and now offers its solutions on a Supply Chain Process Platform. This means its supply chain solutions have cross-functional awareness and that changes made in one part of the supply chain are transmitted to other processes that need them. It allows information, assets and capabilities to be harnessed in ways previously not possible to help companies build profit and market advantage.

It not only means IT Directors and CIOs can now exchange their legacy supply chain system components for supply chain systems that are best in class, functionally rich, flexible, scalable and interoperable with their other systems, it also means they can invest in supply chain systems that are constantly evolving and future-proof.

Against a backdrop of continuous change, an increasingly volatile and global economy, and the arrival of the omni-channel selling world, companies need to have high levels of agility in their supply chain. A platform-based approach to running supply chain systems gives organisations the ability to fully optimise their supply chain processes as well as an approach that lowers the overall cost of technology ownership.