The Cloud Advantage: Rethinking ERP in the Age of Agility

Enterprises everywhere are grappling with the stubborn limitations of traditional Enterprise Resource Planning (ERP) systems. Those monolithic, decades-old platforms are now acting more as obstacles than facilitators of business agility. Costly ERP failures show that sticking with incumbent solutions no longer guarantees stability or growth. Instead, it can jeopardize both.

At Deel Local Payroll, powered by Payspace, we understand these pain points firsthand, having guided organizations worldwide through seamless digital transformations that unlock real value from their core HR, payroll, and IT processes.

Here, I’ll share some actionable strategies for modernizing your ERP landscape, drawing on proven cloud-native approaches, integration best practices, and real-world partnership successes that empower companies to scale and adapt with true flexibility. Discover how moving beyond the limits of legacy ERPs mitigates risk and sets the stage for efficient, future-proofed operation.

The cost of clinging to the past

When legacy ERP systems fail, the fallout is rarely small. In 2023, South African retail giant Spar reported R1.6 billion in lost turnover following a troubled SAP implementation, resulting in a R720 million profit loss for the region. Although the project has since stabilised, the financial and operational damage remains a cautionary tale.

The UK’s Birmingham City Council faced an even more dramatic breakdown. What began as a £20 million Oracle migration spiralled to nearly £100 million (R2.3 billion), pushing the council to declare financial distress and suspend payments on equal pay claims.

These are not isolated incidents. According to Gartner, as many as 70% of ERP projects fail to meet their stated objectives. It’s a persistent pattern, one that appears to be worsening, particularly when traditional ERP vendors are involved.

The problem isn’t just in the implementation. It’s architectural. Many of these systems were built for a different era, when software was monolithic by design and digital agility wasn’t a strategic priority. Today, that foundation creates risk, not resilience.

Cloud-native vs. traditional ERP: what’s the difference?

Why do so many ERP projects fall short? The causes vary, but at Deel Local Payroll, powered by PaySpace, we’ve seen consistent patterns through our work in digital modernisation.

Many incumbent ERP vendors now promote cloud capabilities. But adding cloud-based features to legacy software doesn’t make it cloud-native. Cloud-based payroll is designed from the ground up to support agility, integration, and modularity. These traits create modern competitive advantages and allow organisations to adapt quickly without being locked into rigid systems.

One major architectural divide is between monolithic design and microservices. Traditional ERP systems rely on vast, tightly coupled software libraries to cover every business function. That monolithic design makes them hard to modify, slower to upgrade, and resistant to incremental change.

By contrast, cloud-native platforms use microservices—modular, specialised components that interact through APIs. This makes it much easier to add or adapt functionality without disrupting the whole system. Microservices also support faster development cycles, targeted scaling, and real-time responsiveness—capabilities that traditional ERP frameworks struggle to match.

It's like comparing two walls: one made from immovable poured concrete, the other a harmony of brickwork that is easy to modify yet can still carry the enterprise. For modern and agile businesses, the second choice is the smart choice over incumbent ERPs.

A blueprint for ERP modernization

The limitations of traditional ERPs are not just theoretical. They play out in real business scenarios. One recent modernisation project with a major bank illustrates what’s possible when outdated systems are replaced with cloud-native solutions tailored to evolving business needs.

The bank’s legacy ERP had become an obstacle to growth, particularly in managing complex payroll operations across multiple geographies. Rather than reinvest in rigid infrastructure, the organisation partnered with Deel Local Payroll, powered by PaySpace to redesign its payroll architecture from the ground up without disrupting existing business-critical systems.

By leveraging our native cloud payroll engine, the bank was able to retain its operational data and regulatory processes while introducing modern features like real-time data processing, automated compliance updates, and seamless multi-country support. The implementation took a phased, modular approach, delivering early wins, reducing disruption, and avoiding the risks typical of “big bang” ERP migrations.

This transformation earned industry recognition, including Transformation Project of the Year at the Global Payroll Awards 2024, and provided a model for how large enterprises can evolve beyond legacy ERP constraints with speed, agility, and confidence.

Strategies for a successful shift

Modernising your ERP approach doesn’t require replicating the past with a new logo. It requires rethinking the fundamentals. Based on our work with large-scale transformations, these are the key strategies that make cloud-native ERP modernisation successful:

Turning complexity into capability

Traditional ERPs rely on a reputation that only they can handle the demanding functions of a large and complex business. This belief was once true in a time before cloud software. Now, the right combination of platforms, partners, and vision can achieve remarkable flexibility and modernisation.

This revolution extends to modern cloud-native ERPs as well. Like their fellow platforms, they are not trying to do everything on their own. Instead, they embrace the strengths of efficient integration, modular features, low-risk customisation, and incredible flexibility.

See how your teams can benefit from Deel Local Payroll, powered by Payspace, and discover the next generation of payroll technology. Start by booking your 30 minute demo today.