Should You Replace AS/400 with a Modern ERP System?

AS/400 Overview

The AS/400 architecture was used for its reliability. Released by IBM in 1988, this system managed mission-critical tasks for industries such as manufacturing, medical (i.e. hospitals) and even those operating within the public sector (i.e. bank and government). Since its release, the system has been updated and renamed many times. However, the simple truth is, companies just aren’t using it the way they used to. In fact, AS/400 is considered to be an outdated system by most. Though the AS/400 system remains a critical part of the computing infrastructure by top organizations, it just isn’t used to run everyday applications that are geared more toward employee or office functions. So we come back to the question at hand: should you replace AS/400 with a modern ERP system?

Yes. But why?

AS/400 Legacy

Occasionally, companies will stay on legacy solutions that prove to be reliable over a long period of time. The AS/400 has a DOS-like interface and requires two types of experts: those who know how to program it, and those who know how to use it. Unfortunately, the AS/400 isn’t as user-friendly as some of the modern systems on the market these days, making it nothing more than a reminiscent of a bygone era. As technology becomes more advanced, users expect a simpler experience. Additionally, ever since IBM has retired the system, finding qualified individuals to either program or use it has become increasingly difficult.

All these issues lead new companies away from the AS/400 system. On the other hand, companies who already use the AS/400 are often bound by the system. Since adding or modifying features on the AS/400 is such a task, it leaves companies with no other option than to stay. 

AS/400 Benefits

If the AS/400 has such issues, why are businesses still using it? 

  • Reliable System
      • Companies have stayed with AS/400 for a long time because it works. While it has issues, reliability was never an issue. Sometimes when something works, there is no need for change. Even if it can be improved or upgraded – the lack of urgency and necessity speaks for itself.
  • Scalable System
      • The AS/400 allows businesses the option to choose an affordable 4-core server, all the way up to a 256-core machine. 
  • Secure System
      • If the AS/400 system is configured correctly and equipped with the right software, then the platform will be marked as very secure. It’s no wonder top-tier businesses, including bodies of government and bank institutions, still use this system.
  • Compatible System
      • The IBM company is both modern and compatible. Not only does it support a mix of native and open source development languages (i.e. SQL, Java, PHP, C++ and more), it also protects your investment by avoiding expensive code migrations when platforms are updated (as they have been over the years). 

AS/400 Risks

We briefly mentioned that AS/400 is a legacy system – but what does that mean exactly? A legacy system is an old or out-dated system that continues to be used by a business or organization because it still performs the functions it was initially intended to do. However, legacy systems no longer have support and maintenance and they are limited in terms of growth. The only reason they haven’t gone obsolete is because they cannot easily be replaced.

This does not mean legacy systems don’t have their own set of risks and challenges:

System Support

  • If the vendor is no longer selling the system or software your company is using, nor offering support for it, it is not likely that the company will be able to receive help regarding a problem if there is one.

Data Silos

  • Legacy systems are not usually built to be integrated with newer systems; isolating data from other systems.

System Performance

  • Legacy systems tend to slow down over time, affecting and even reducing an organization’s performance, efficiency and productivity.

Maintenance Costs

  • Maintaining a legacy system means investing money on an IT resource that will need to be replaced sooner or later. Additionally, as is the case for any significant IT infrastructure change, the costs of switching can be quite high. If a business has used something for decades, it becomes even more demanding.

Again, companies that have been using AS/400 may not even care for all the benefits or even the risks aforementioned. Since the system still works, and IBM does a relatively good job with maintenance, they may see no reason to switch over to a more modern system. Furthermore, AS/400 does form the foundation for some of the most powerful servers and operating systems on the market today. So then this begs the question: can this system truly thrive in this new digital age?

AS/400 vs. Modern Systems

Well, IBM updates the AS/400 consistently. And since the platform evolves, embracing some modern technologies, perhaps that actually is enough. 

And so the questions companies on the AS/400 need to ask themselves is:

  • Is the current system working for my main needs?
  • How much time is spent fixing issues that wouldn’t come up with a modern system?
  • How much money am I losing by not adding new features that would increase revenue or make us more efficient?

When we’re talking about a business still using legacy systems, the time it takes to switch systems is relatively short. After all, it has likely used that legacy system for years and years, and maybe even decades, and that dwarfs the period of months or few years it takes to implement a new system.

With those time spans in mind, if the company judges the amount of money it’s losing (over years and years) is greater than the (relatively) short-term cost of finding, implementing, and transitioning to a new ERP system, that’s when it knows it’s time to move on.

Modern ERP Systems on the Market

If they decide that’s the right plan of action, what are some modern solutions businesses can look at in replacing their AS/400? One option is Odoo, a powerful open-source ERP software. Odoo has over 18,000 apps, and because of its open-source nature, is easily customizable for individual business needs.

Another solution is Acumatica; a cloud ERP software that has a flexible, efficient, and unified tool that will help you maintain your business processes. It increases company-wide transparency and allows your entire organization access to the platform. With multiple data storage locations, high availability, and frequent backups, Acumatica protects your business against mishaps that can lead to extended business outages.

Lastly, we have Oracle+NetSuite; a cloud-based multi-tenant ERP software. NetSuite is used by over 40,000 organizations worldwide. It offers a complete business suite and is especially well-known for its finance tools.

Bista Solutions | Trusted ERP Partner

Bista Solutions is a partner with Odoo, Acumatica and NetSuite, and has implemented ERP software solutions for over a decade, providing hundreds of companies across various industries with optimized business solutions. By using an agile approach, Bista can ensure that the product meets the company’s individual needs and successfully manage large implementations. If you have any questions about the AS/400 or want a free consultation for your business, you can reach us through our contact form or at +1 (858) 401 2332.

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