The fashion industry is at the forefront of a digital revolution, with rising consumer demands for sustainability, transparency, and innovation reshaping how brands operate. From digital product passports to end-to-end supply chain visibility, customers now expect unprecedented access to detailed information about their purchases. Yet, despite this modernisation, many fashion brands find themselves constrained by outdated legacy ERP systems—such as SAP AFS or custom-built solutions, that are unable to keep pace with these new demands.
While older ERP systems were once reliable, they now struggle to integrate with new technologies and are set to lose support and functionality, with SAP ending support for its legacy systems by 2027, for example. This therefore is creating an urgent need for brands to consider upgrading to more modern, agile systems. Modern solutions such as SAP S/4HANA have emerged as attractive solutions for meeting these new demands, but migrating from legacy systems to these next-generation platforms is no small task, particularly for businesses with complex Go-To-Market (GtM) strategies. James Zhou, Sales Manager for Fashion and Retail, Absoft, discusses more below…
The Limitations of Legacy Systems
Legacy ERP systems, including SAP ECC, AFS, I-S Retail, and other custom-built platforms, were developed to handle the challenges of the past, long before sustainability, transparency, Hyper-Personalization, vertical integration and global supply chains, plus a plethora of legislative changes such as carbon tax reporting and e-invoicing to name just two, became critical pillars of the fashion industry. As a result, these systems are often ill-equipped to support innovations like IoT-enabled factories, AI-driven demand forecasting, and blockchain-powered supply chain tracking, all of which are becoming powerful in today’s market.
These older systems were designed with rigidity, focusing on isolated processes such as inventory management or order processing without the seamless integration required for omnichannel retail. In an industry as dynamic as fashion, with demanding wholesale business to business customers, this lack of flexibility can create bottlenecks in operations, slowing response times and hindering the ability to meet shifting consumer preferences and market disruptions. Product cycles are getting shorter, and fashion retailers such as Inditex are increasingly searching for solutions to push out clothing quickly in response to ever changing trends.
Moreover, legacy platforms struggle with the integration of cloud-based technologies and mobile platforms, both of which are necessary for real-time inventory management and data-driven decision-making. As fashion brands strive to meet sustainability targets and enhance customer experiences, their reliance on accurate, real-time data has grown, yet older ERP systems cannot deliver the speed and agility required.
Bridging the Gap: Moving to Modern ERP Systems
For fashion brands seeking to overcome these limitations, the migration to modern ERP systems is a critical step in future-proofing their business. Unlike older systems, these systems are designed with integration, scalability, flexibility and cloud capabilities at its core, allowing companies to adapt quickly to regulatory changes, consumer demands, or shifts in market dynamics.
However, this transition comes with its own set of challenges. Many legacy platforms are not directly compatible with these systems, making the migration process complex, particularly for businesses with diverse Go-To-Market (GtM) strategies, perhaps across different countries or regions. Many companies will experience delays when migrating to new digital platforms due to unforeseen complications in transferring data and systems—a problem especially relevant in fashion, where seasonal data, complex supply chains, and supplier relationships are key to operations.
The challenge, therefore, is not only in migrating data but also in ensuring that the specific needs of the fashion industry—such as batch traceability, pricing flexibility, and rapid replenishment cycles—are fully met in the new system. Without a structured, phased approach to migration, brands risk operational downtime or even data loss, which could severely disrupt their business. For some businesses, this data and business processes are crucial to their operations, so getting this right becomes paramount.
Best Practices for a Seamless Transition
Despite the complexity, the transition to these systems is achievable with careful planning and execution. A phased migration strategy, where businesses tackle one functional area at a time—such as supply chain management, finance, or customer relationship management (CRM)—allows for gradual adaptation without compromising day-to-day operations. This also provides an opportunity to test new functionalities and ensure they meet business requirements before fully committing and rolling them out widely. Last year’s CrowdStrike outage underscores the importance of this ‘test first’ approach.
Fashion brands must also invest in proper data preparation. This includes data cleansing and rationalisation to ensure that only relevant, accurate data is transferred to the new system, minimising compatibility issues and streamlining the migration process. For some businesses, the code embedded in their legacy systems is a key part of their unique selling point (USP), making it critical to ensure that this custom code is kept intact and fully functional within the new system, or replaced with new modern integrated functionality. Furthermore, user training is essential to empower teams to take full advantage of the advanced features found in modern ERP systems, such as embedded analytics, machine learning, and real-time reporting.
A dedicated support team, with expertise in these modern ERP systems and the unique demands of the fashion industry, can significantly ease the migration process. These teams can help identify potential roadblocks early, ensuring a smoother transition and reducing the risk of operational disruption and downtime.
Unlocking the Future Potential of Fashion
Migrating away from legacy systems is not just about addressing current limitations; it’s also about unlocking future growth opportunities. With greater visibility across the entire supply chain, brands can make more informed decisions, forecast demand with greater accuracy, reduce waste, and align more closely with sustainability goals—key concerns for today’s eco-conscious consumers. Brands championing sustainability stand to gain significant reputational advantages and can make themselves more appealing to eco-conscious customers, ultimately helping to boost sales and profits.
Emerging technologies such as AI and IoT, which are becoming essential in optimising production, inventory management, and customisation, are seamlessly integrated within these modern ERP platforms. For example, AI-driven demand forecasting can help avoid overproduction and bottlenecks, while IoT-enabled factories allow real-time adjustments in production, reducing lead times and enhancing efficiency.
Moreover, as sustainability becomes a non-negotiable aspect of doing business, modern ERP systems enable greater transparency and accuracy, allowing brands to comply with new regulations such as the Corporate Sustainability Reporting Directive (CSRD), making adjustments to CO reporting if a vessel is diverted for example, using more fuel, and offer the level of product detail that consumers expect. From digital product passports to blockchain-powered supply chain traceability- important for statements about recycled materials or organic cotton, modern ERP systems equip fashion brands with the tools needed to remain competitive and compliant in the fashion industry today.
Conclusion
The fashion industry is on the cusp of a digital transformation, but for many brands, outdated legacy systems stand in the way. Migrating to newer, more powerful ERP systems offers fashion companies the flexibility, agility, and insight needed to thrive in a world where transparency, sustainability, agility, and innovation are critical. By embracing a phased approach and leveraging the support of dedicated experts, brands can ensure a smooth transition that not only helps to solve the challenges they face today, but also sets them up for long-term success in the future.
Photo by freestocks on Unsplash
