Why Legacy Systems Leave CPG Brands On The Shelf

Staying fresh is at the core of the fast-moving consumer goods (FMCG) business, particularly in the Food and Beverage (F&B) segment. Shelf life is also dependent on consumer tastes that can pivot overnight and volatile supply chains.

Still, many F&B companies are trying to compete in this high-speed race while running on legacy systems. These ERPs, which are often heavily customized and weighed down by past acquisitions, serve as digital anchors that hinder the business. In the first of a two-part interview with SAPinsider, Ron Gilson, Executive Advisor and Principal at NTT DATA Business Solutions, gives insights on why older systems are a recipe for disaster and how a modern SAP landscape provides the agility needed to thrive.

The Ticking Clock

The complexities that legacy ERP systems bring create inefficiencies and risk. Gilson lists four critical failure points for F&B companies clinging to outdated systems:

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1. Security: Many legacy solutions are no longer being actively upgraded to address new security threats.  Additionally, many on-premises legacy solutions are running on outdated infrastructure, which exposes an organization to additional threats.
2. Scalability: Every CPG organization will have a unique growth path, encompassing new products, distribution channels, geographies, and mergers and acquisitions (M&A). Legacy solutions and the corresponding business processes lack the capabilities to handle significant increases in transaction volume, customers, products, plants, and suppliers that stem from this growth. Thus, manual processes and workarounds that were acceptable earlier cannot support new volume or transaction complexity.
3. Agility: New business challenges and opportunities present themselves daily.  Successful CPG organizations are those that can quickly respond to and capitalize on these changes. Complex integrations, manual workarounds, customizations, and inefficient business processes limit their ability to respond promptly, thereby putting the organization at risk in terms of cost, profit, opportunity risk, growth, and customer satisfaction.
4. Reliability: As the age and complexity of the landscape increase, the risk of failure increases.

Gilson notes, “At some point, running obsolete software and infrastructure simply creates too much risk.” That tipping point often arrives when the cost of adding headcount becomes unacceptable, when the lack of real-time data renders it impossible for an organization to compete, or when new business models and M&A make processes more complex.

M&A Agility

The CPG sector is fueled by M&A. But integrating a new brand can be a technical nightmare, often resulting in a system where one company’s ERP is bolted onto another’s.

Gilson states that this is where a modern SAP landscape fundamentally changes the game. However, he adds that the approach must be strategic. “Understanding the M&A strategy, goals, and objectives is critical and should be the first step in the analysis,” he advises.

He adds that as organizations transition from legacy ECC environments to SAP Cloud ERP, they can re-evaluate and re-implement some of the foundational structures and business processes in a more M&A-friendly manner.

“Creating organization structures that provide flexibility and facilitate reporting and analytics, implementing best practices and simplifying or eliminating redundant processes, automating tasks, eliminating customizations, and consolidating technology landscapes facilitate much more rapid integration of acquisitions,” he explains.

A Single Source of Truth

Data in the F&B segment is complex due to needs such as farm-to-fork traceability and intricate promotional models. In a legacy environment, this data is often scattered and untrustworthy.

“Traditionally, data cleansing and harmonization across a plethora of best-of-breed solutions and databases has been a complex and manually intensive process,” Gilson explains. “In many cases, the integration is incomplete and inflexible, resulting in significant resources devoted to reconciling data between systems.”

He concludes that an integrated environment, combining SAP S/4HANA Cloud, the SAP Business Suite, and the SAP Business Data Cloud, eliminates this chaos. It creates a single, holistic data platform where transactional data is harmonized in real-time. This single version of the truth is the foundational ingredient for making smarter, faster decisions.

What This Means for SAPinsiders

Acknowledge the actual risks associated with legacy systems. SAPinsider research indicates that 32% of organizations have already transitioned to SAP S/4HANA in 2025, a 10% jump compared to 2024. However, despite this momentum, 21% of organizations remain in the evaluation phase. SAPinsiders should note that legacy ERPs, such as SAP ECC systems, represent a growing liability in terms of security, scalability, and agility, which directly impacts market competitiveness.

Frame modernization as an M&A enabler. Your move to SAP S/4HANA Cloud is a powerful strategic tool. Use it as an opportunity to build a clean, flexible foundation that turns future acquisitions from a technical headache into a repeatable, efficient process.

Prioritize the single source of truth. The struggle to reconcile data across disparate systems is a significant pain point. Championing the move to an integrated SAP landscape is the only sustainable way to achieve the data quality and consistency required for accurate data-driven decision-making.