In the fast-moving consumer goods (FMCG) sector, particularly within the Food and Beverage (F&B) industry, staying fresh is paramount—not just in product quality, but in operational agility and responsiveness. Consumer tastes shift rapidly, supply chains endure volatility, and shelf life considerations impose relentless pressure on companies to adapt quickly. Yet, despite these demands, many F&B businesses still rely on legacy ERP systems, which have become a significant obstacle to competitiveness.
Legacy ERP systems, often heavily customised and burdened by technological debt from past mergers and acquisitions (M&A), act as digital anchors rather than drivers of growth. According to Ron Gilson, Executive Advisor and Principal at NTT DATA Business Solutions, these outdated systems present four critical failure points: security vulnerabilities, lack of scalability, insufficient agility, and declining reliability. Many legacy systems no longer receive updates to counter new cybersecurity threats and frequently run on outdated on-premises infrastructure, exposing organisations to increased risk. This is compounded by the limited scalability of these systems, which struggle to manage expanding transaction volumes, new products, and geographical expansion. Manual processes and workarounds, acceptable in earlier stages, become unsustainable as businesses scale.
The inability to react swiftly to new business challenges puts companies at a disadvantage, leading to increased costs, lost opportunities, and diminished customer satisfaction. As Gilson highlights, the tipping point for many organisations comes when adding headcount to compensate for system inefficiencies becomes financially untenable, or when a lack of real-time data hampers competitiveness and complicates integrating new business models or acquisitions.
M&A activity, a major growth driver in the consumer packaged goods (CPG) landscape, exemplifies the challenges of legacy systems. Integrating newly acquired brands often results in clunky, patched-together ERP environments that are difficult to manage. A modern SAP landscape, however, offers a transformative alternative. Gilson advises a strategic approach that begins with understanding M&A goals and then re-implementing foundational business structures in a more flexible, M&A-friendly manner. This includes creating organisational structures that allow agility in reporting and analytics, automating tasks, eliminating redundancies and customisations, and consolidating technology landscapes to enable faster, smoother integration processes.
At the heart of modernisation efforts is the need for a single source of truth. F&B companies grapple with complex data requirements such as farm-to-fork traceability and sophisticated promotional models, often leading to inconsistent and unreliable data in legacy setups. Gilson advocates for integrating environments that combine SAP S/4HANA Cloud, SAP Business Suite, and SAP Business Data Cloud — harmonising transactional data in real time to create a holistic, trustworthy data platform. This data integrity is essential for making faster, smarter, and more confident business decisions.
Beyond the F&B sector, the hidden costs of legacy ERP systems are increasingly recognised across manufacturing and related industries. Inefficiencies from outdated processes, costly customisations, and the high maintenance burden weigh heavily on organisations. These systems limit visibility into operations and reporting while exposing companies to cybersecurity risks that modern solutions are better equipped to mitigate. Problems like integration issues, lack of compliance with evolving regulatory standards, and expensive manual data reconciliation also plague legacy environments. These challenges underline the urgency for businesses to modernise their ERP systems to stay competitive.
Cloud-based ERP solutions present clear advantages over legacy on-premises platforms. They offer automatic updates, enhanced security, remote accessibility, and scalable architectures that can adapt to fluctuating demands. Moreover, these modern platforms facilitate integration with cutting-edge technologies like artificial intelligence and machine learning, opening new avenues for operational efficiency and customer engagement—capabilities often unreachable within legacy frameworks.
Overall, the move towards modern ERP systems involves recognising the growing liabilities that legacy systems represent, framing the transition as an enabler for strategic growth, and prioritising data integrity through integrated platforms. For companies in the F&B and broader CPG sectors, this shift is crucial not just for day-to-day efficiency but for long-term survival in markets defined by rapid change, demanding consumers, and complex supply chains. As the landscape evolves, businesses that invest in modern, agile ERP infrastructures position themselves to innovate, scale, and thrive.
Source: Noah Wire Services
Subscribe to Industry Updates
