ERP is complex software that sits at the center of a business. It also is a mature product. This makes the rise of cloud-based ERP something more than your typical software sector moving to the cloud. ERP in the cloud is not as simple as project management software and email, and the stakes are higher for businesses.
The choice between using an on-premise ERP system and one based in the cloud is far from a no-brainer. There are many reasons that your business might want to consider on-premise ERP even in 2017: the need for heavy customization, complete control, features only found in mature on-premise ERP systems, and those who want to manage the pace of software change or use IT for competitive advantage. If any of these factors are needed for your business, you might want to read our previous article on signs you need on-premise ERP.
That noted, most businesses should look strongly toward cloud-based ERP. There are several reasons why the cloud improves upon the on-premise model, including easier deployment, cost flexibility, better security, better integration, and many other reasons. ERP is not immune to the charms of the cloud model.
With that in mind, here are six signs that cloud ERP might be right for your business.
Sign #1: You Want Fast Deployment
ERP implementation is notoriously complex. This complexity is greatly reduced with cloud ERP, however; it literally can take minutes to deploy in the cloud. That is in contrast with hours to install and days or months to configure on-premise ERP systems typically.
“On-premise ERPs typically require lengthy installs; they are not simple application installations such as Word or Excel,” says Matt Schuval, CEO of ERP consultancy, Datix. With cloud ERP, however, he says businesses have almost immediately deployment and just have to log in when there is a new location or expansion.
Sign #2: You’re Small
On-premise ERP is not usually a small software buy. Nor do such systems run themselves; there is constant hardware and software maintenance. The cloud relieves all of these challenges, offering a low-cost entrance to ERP and removing much of the administrative burden. This makes cloud ERP a good fit for smaller firms.
“With cloud ERP, businesses won’t find themselves in a situation where they have a huge upgrade project that puts huge risk on their digital core,” says Darren Koch, chief product officer for the SMB team at SAP. “Upgrades are simply an evolution as the software is released.”
Schuval at Datix puts it more bluntly: “Do you want to invest in internal knowledge and hardware to support the infrastructure of the ERP or invest in growing your business? Once that ERP is installed, you won’t have to worry about server capacity or performance; all you’ll need to be up and running is a good internet connection.”
Sign #3: You’re Not Patching and Updating Fast
Is your software the latest stable release, with all security updates applied and all hardware equally supported? If your ERP system lags behind the latest release, this could be a sign that you should consider cloud ERP.
“Because cloud enterprise systems are run by the vendor, you’ll be able to stay up to date and avoid costly upgrades,” stresses Schuval. “Instead, the vendor is responsible for installing those upgrades and providing support for your system.”
Koch at SAP adds that cloud ERP not only keeps the system more secure, it also delivers faster innovation.
“The innovation cycle is much faster with cloud ERP, and there is an opportunity for ERP vendors to better understand what changes are producing positive or negative results,” Koch notes.
Sign #4: You Need Better Integrations
On-premise ERP systems are wide-ranging, built on legacy systems in many cases, and not exactly what you would call bleeding edge from a design or connectivity standpoint. For some businesses this is acceptable, but startups and firms that need tight integration among various systems and web platforms should look strongly at a cloud ERP solution.
“Cloud solutions are inherently open and connected,” says Koch. “Whether it is connecting best of breed cloud solutions with the ERP, expanding the users of the system within a company, or collaborating with others in the value chain, cloud ERP is more than a substitute for on-premise.”
Sign #5: IT is Not a Competitive Advantage
Sometimes IT systems are tools, and sometimes they are used for competitive advantage through unique processes or customizations. Since on-premise ERP delivers far more latitude for product customization, businesses should ask themselves if their ERP system is needed for competitive advantage. If not, go cloud ERP.
Companies that compete based on product capabilities and service excellence will be better served by cloud ERP in most cases, according to Koch, while businesses that use their IT staff to drive competitive advantage through operations are probably better off with an on-premise solution.
Sign #6: You Need it Simple
Finally, a clear sign you need cloud ERP is when simplicity is an important factor. While cloud ERP does not offer the software maturity or quite the range of customization that businesses can get through on-premise ERP, it is wickedly simpler—like just about every software offering in the cloud. So if your business needs simplicity or ERP is a scary topic, cloud ERP is the right choice.
“Cloud ERP lets businesses focus on their core operations, not running data centers,” says Koch. “Backups, disaster recovery, hardware maintenance, etc. are outsourced.”
The question of whether to choose an on-premise or cloud-based ERP system is not a gimme; both versions have their distinct advantages. For many businesses making the decision, though, cloud ERP probably will rise to the top—especially among smaller firms.
About the Author
Peter Kowalke is journalist and editor who has been covering business, technology and lifestyle trends for more than 20 years. When not writing, he runs Kowalke Relationship Coaching.
Source: SANS ISC SecNewsFeed @ May 3, 2017 at 05:12PM