How the Cloud is changing what we do
Implementing ERP in the past has often been a multi-year, high cost, complex project for most companies. Traditionally this was hosted at the customer site (referred to as on premise). At the turn of the century in 2000 more ERP systems were hosted remotely off site often by a third party (referred to as hosting), however this still carried the initial software licence cost up front and a monthly hosting cost.
Cloud ERP has totally changed our industry, with most top software companies now offering their services on cloud. This has led to multiple benefits of lower cost and reduced implementation times. Sage for example have even dropped the word ‘ERP’ from their vocabulary, now focussing on Business Management Solutions and the least technology being faster, simpler and more flexible than ERP.
However, we often get asked the question, is Cloud suitable for our company? Does it matter what size we are or what complexity we have in our processes?
Below is a summary on the benefits of moving to the cloud as we see them
- Cost – Cloud Services are offered on what is called a SaaS (Software as a Service) model, basically pay as you go. This model reduces the traditional up-front capex cost of software procurement. Many companies like ourselves now even offer the implementation services to be paid on a subscription basis. This helps the CFO turn this type of cost from capex to opex.
- Deployment – ERP projects typically took months, sometimes years to complete, often requiring lengthy customisation in certain areas. Modern Cloud services follow industry best practice and have industry ready methodologies that dramatically cut a project length. Taking implementation time down to as little as 8 weeks in some cases.
- Upgrades, software and maintenance – Upgrading an on premise solution was often a lengthy process, requiring considerable time and investment from the end user. Now by adopting a cloud solution companies can take advantage of software updates managed by the provider, which dramatically reduces any ongoing maintenance costs. Likewise with maintenance, the hardware and software is the responsibility of the provider and large internal teams are not required to support the infrastructure or the software.
- Backup – Again a major headache for any company with an on premise solution. Reputable cloud providers take careful measures to ensure there is no data loss and provide service levels against such things. It is another headache removed for the end user.
- Integration – Cloud solutions are built on open standards, and designed to allow integration to additional products now or in the future.
- Scalability and Flexibility – Modern Cloud solutions are much more functionally rich than anything that has gone before and constantly evolving. Additional functionality or business changes can easily be added without any of the traditional challenges. Functionality around reporting and social collaboration make these types of solutions much more appealing to the user. Information is pushed to them, whereas traditionally they had to request it.
Moving to the Cloud is still a daunting prospect for many customers and it may not be suitable for all. For any customers requiring supply chain functionality we would look to ensure all requirements are covered to match any complex business processes. Any approach would also be to adopt best practice within the application as opposed to heavily customising a solution. Something which is much harder to do in a cloud environment.
Before moving any customer to the cloud we would always sit down with them and assess the key points they should consider. The benefits for startups or many mid-market companies are easily sold from a cloud perspective, but we would also look to assess other factors like industry type, security needs and complexity.
Some companies may even benefit from a hybrid model where clear cost benefits can be demonstrated by moving some applications to the cloud, retaining some of their processes or functionality in their current ERP system.
If you would like to discuss this further with us or have questions or concerns about moving to the cloud then please do not hesitate to CONTACT US.
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