Other answers focus on how to improve the design, but since you asked why the design looks dated:
Font too small. The very left looks less dated than the rest, why's that? On the left, the font size matches the vertical space available for the text, while in all other buttons the font is far too small. Let's also throw in the all upper case, Arial, and the 3 fixed text lines on each button (every button other than Pay seems to be formatted to receive text on vertical top, center and bottom, leading to awkwardness if there are only 2 lines of actual text).
Unattractive colors. The screen looks like it uses 9 almost random colors, all of which are part of the original 64 EGA colors. Many modern GUIs use more subtle color differences, unless there's a big difference between the buttons. Some modern GUIs also use color gradients in the buttons.
2 Color 3D effect. The 3D buttons which use a 2 pixel wide border with uniform white on the upper left and uniform grey on the lower right, plus a one pixel all black border around them are indeed out of fashion.
Too simple. By only using buttons, there's a missed opportunity to intuitively indicate we're currently looking at the Food section. A modern Gui would use other clues to indicate the Magenta and yellow parts belong together, such as a filled rectangle behind the yellow buttons which extends to the background behind the food button:
Finally, the POS System header bothers me, but I think that's just bad design, and hasn't got anything to do with it being dated.
Before changing anything, make sure the current display out supports more than EGA (16 color palette, chosen from a 64 color table), and if you want to use images make sure the resolution of the display allows the user to recognize what's shown in the images. Sometimes the devices used in the field are quite a bit older than one would imagine. Also, when changing colors keep in mind color blindness.