The Hidden Dangers of Old ERP Systems

Although many South African organisations may be reluctant to transition to modern enterprise resource planning (ERP) systems, SAP says doing so is critical to future-proofing local businesses.

Although many South African organisations may be reluctant to transition to modern enterprise resource planning (ERP) systems, SAP says doing so is critical to future-proofing local businesses.

This is the view of SAP Africa director of customer evolution Gerhard Alberts, who said many organisations run highly customised legacy systems that have evolved over decades.

He warned that remaining on legacy systems carries hidden costs, increases operational risk, limits integration with modern cloud and AI tools, and results in higher manual overheads.

A significant challenge SAP faces is migrating legacy users to its latest ERP system, S/4HANA, a process which requires input from all parties.

“Migrating to S/4HANA is a business transformation process that requires organisations to rethink processes, data structures, and integrations,” Alberts said.

Alberts emphasised that enterprise resource planning (ERP) transformation is not a simple technical upgrade. A critical factor in migration success is organisational readiness and strong leadership.

“It requires a fundamental shift in how people work, how decisions are made, and how processes are structured,” he said.

“Without clear governance, disciplined execution, and strong stakeholder engagement, even the most robust systems will underdeliver.”

Alberts highlighted data readiness as another major barrier to migration. Poor data, inconsistent master data, and insufficient data cleansing efforts regularly undermine system performance.

It also erodes user trust, making it difficult for organisations to see the true value of their ERP investments.

“One of the most persistent misconceptions around SAP migration is that failure is rooted in the technology itself,” Alberts said.

“In reality, modern ERP systems are highly mature, stable, and deeply embedded in global business operations.”

The biggest challenges emerge from organisations’ implementation and transformation approaches, rather than from software.

Alberts explained that breakdowns generally occur during implementation processes and in organisational alignment.

This is because businesses are frequently navigating increasingly complex IT landscapes that combine SAP and non-SAP systems.

“When workflows across these environments are not properly coordinated or monitored, inefficiencies and failures begin to surface,” Alberts said.

South African businesses worry about cost and complexity

According to Alberts, South African organisations’ hesitance to migrate stems from concerns about risk, cost, and complexity.

He explained that because many businesses operate with highly customised legacy environments that have grown over the years, transitioning to S/4HANA represents a significant business transformation.

“These systems often support mission-critical functions such as payroll, procurement, and financial reporting, which raises the stakes considerably and contributes to a cautious approach,” he said.

Alberts said these organisations will face growing limitations in integrating with modern cloud and AI technologies, adding that fragmented processes also drive higher manual workloads and inefficiencies.

“Ultimately, businesses that delay migration may preserve short-term stability, but they do so at the expense of long-term competitiveness, agility, and innovation,” he stated.

He said a well-implemented, modern ERP system will combine applications, data, and AI into organisations’ business suites.

“The latest ERP systems will consume data where it resides with zero copy data sharing, creating a semantically rich data layer that fuels AI value,” Alberts said.

He added that embracing all facets of AI is critical to future-proofing South African businesses. SAP embeds AI directly into its core applications.

“Across industries such as manufacturing, retail, energy, as well as the public sector, customers are already seeing tangible impact in Finance, Human Resources, and Supply Chain,” he said.

He added that SAP’s AI-embedded core applications ensure intelligence is embedded in workflows rather than delivered through separate, loosely connected tools.

He said this helps finance teams close faster and strengthen controls, HR teams improve workforce planning and employee services, and supply-chain leaders build more resilient and efficient operations.