Choosing between Enterprise Resource Planning (ERP) software on premises vs cloud can have a significant impact on your business. See if you can relate to the situation below:
It’s month-end, and Kevin, the CFO of a mid-sized manufacturing and retail company, pulled an all-nighter trying to finalize the financial statements to send to the owners before the monthly business review when his ERP freezes up, and an email appears in his inbox with the dreaded subject line: “System Downtime Alert.”
The company’s legacy ERP system—which is installed on an old server on the company network and stored in the back room at the corporate office—has crashed again, halting front office sales, inventory tracking and throwing production schedules into chaos. The stores are unable to process customer sales orders and payments; manufacturing orders cannot be retrieved, and the stakeholder board meeting is in 30 minutes.
Situations like these aren’t just frustrating; they’re glaring reminders of the system’s age, limitations, and the unrelenting demands for costly upkeep. The thought of moving from an on-premises ERP to a modern solution hosted in the cloud feels overwhelming— is my data safe? what about the cost? will my team embrace and learn the new software? … and what if it doesn’t work?
Sound familiar? If so, you’re not alone. Many business leaders hesitate to move on from legacy systems because change feels risky and they think, “Why fix what’s not broken?” But here’s the reality: Staying put might be the bigger gamble.
Decisions to stay status quo on outdated systems usually creates more challenges than they solve. Many of my customers have accepted down time (due to outdated hardware and lack of investment in modern software and technology) as normal — until they are hit with something like ransomware or full system failure, only to find out they don’t have good backups or a sound data recovery plan.
Core Challenges with Legacy ERP
If you are running an ERP that was written in the early 2000’s (or older) and isn’t available in the cloud, you are likely missing out on great advances in technology that could improve your personal productivity, company profitability, and customer service.
Technological Stagnation
Legacy systems struggle to integrate with modern tools, limiting efficiency, and stifling growth. Without regular updates, the result can be an innovation vacuum, leaving businesses unable to compete effectively.
Cost Implications
Sticking with outdated hardware, troubleshooting recurring issues, and patching old software drains resources over time. Not to mention that manual processes—still necessary with many legacy systems—waste valuable time and increase the risk of errors.
Operational Risks
Older systems introduce risks – from downtime and compliance challenges to an inability to adapt to market changes. This baggage isn’t just theoretical – it can disrupt productivity and growth – as illustrated by Kevin’s unfortunate morning.
ERP On Premises vs Cloud: Addressing the Fear of Change
Migration Myths
ERP migrations often get a bad rap as being prohibitively expensive, overly disruptive, or excessively time-consuming. Phased implementations and Microsoft tools like RapidStart Services ensure a smoother, less invasive transition than you might expect. Yes, there are upfront costs, but the long-term savings and efficiencies make it worthwhile.
Ease of Transition with Microsoft Dynamics 365 Business Central
Transition doesn’t have to be scary. A Cloud ERP system like Microsoft Dynamics 365 Business Central simplifies the process of moving forward. Cloud architecture eliminates the need for expensive hardware, while phased implementations allow businesses to address their needs incrementally. A certified Microsoft Partner can provide expert support to make the transition as smooth as possible.
How Microsoft and Partners Make Transition Easier
Legacy ERP systems often fall short when it comes to flexibility and integration, leaving businesses struggling to adapt to change or connect with modern tools. In fact, according to Microsoft, while 93% of business leaders recognize the importance of flexible and integrated ERP systems, only 39% feel their current system can support business model transformation. Cloud ERP solutions like Dynamics 365 Business Central break these barriers. Its modular design and seamless integration enable businesses to respond to change with agility.
Microsoft’s partner network ensures a smooth transition. Certified partners handle everything from planning and data migration to user training and post-launch support.
Businesses can start small, focusing on core financial functions, and then expand to other capabilities like inventory management or advanced reporting as they grow more comfortable with the system. Testing the waters and gradually expanding your system’s capabilities lets you ease into the full potential of an ERP solution without feeling overwhelmed.
The Benefits of Cloud ERP
Switching to a cloud ERP system like Dynamics 365 Business Central isn’t just about avoiding the pitfalls of legacy systems, it’s about unlocking new opportunities for growth and efficiency. With cloud ERP your business can flourish with:
- Cost savings by eliminating the need to purchase servers and hire IT staff to maintain hardware and install software updates.
- Flexibility and scalability – a cloud ERP system can scale with your business, whether through additional product lines or expanding to new locations.
- Automation and real-time data access with improved operational efficiency and better decision-making through built-in integrations to productivity tools within the Microsoft 365 suite, such as Power BI, Outlook, Teams, Microsoft Artificial Intelligence (Copilot), and more.
- Ability to work remotely from any location with an internet connection and a laptop computer. Mobile apps loaded on your phone will give you access to data within your cloud Microsoft Dynamics 365 Business Central data.
Life after the switch to Dynamics 365 Business Central looks a lot different for Kevin. Microsoft automatically deploys the ERP software updates, maintains backups, and keeps the ERP running soundly around the clock — eliminating the headaches associated with crashes common in the old system. His board of directors is pulling company metrics in time with their Power BI dashboards. With streamlined operations and better data at his fingertips, Kevin now has the bandwidth to focus on more strategic and proactive management of the business and doesn’t need to pull all-nighters to close the books.
Want to explore how Microsoft Dynamics 365 Business Central can streamline your operations? Join our webinar on April 16, 2025, and discover its powerful capabilities. I’d love to see you there!
About the Author
C. Mink LeVoy, CPA, is the Director of Professional Services at Dorado Solutions, Inc., with over 25 years of experience in accounting software solutions. From growing a startup into a leading global Microsoft Dynamics reseller to managing teams and operations, Mink’s expertise spans consulting, project management, and client service. Passionate about helping organizations succeed, she specializes in Microsoft Dynamics GP and Business Central, delivering solutions that drive results and client satisfaction.
Connect C. Mink LeVoy on LinkedIn
