The Next Big Step: From On-Premise to the Cloud ERP
The last thing a controller wants to hear is "we are thinking about moving to a cloud-based ERP solution". Financial managers are creatures of habit. Once they have a process that works, and fulfills the management and reporting requirements of their position, changing that process is the last thing they want to do. For several reasons:
Their balancing and reconciliation processes, some very tedious, give them the confidence to provide financial information that they can depend on and can stand behind its accuracy,
The internal and external recipients of the information appreciate the consistency and accuracy of the data, along with standardize repetitive reporting,
Managing the financial information of the company takes a lot of time and energy collaborating with their organizations to provide timely metrics in order for them to run the business,
And, it is a real pain in the butt to retrain, and learn a new ERP solution.
That being said, moving your ERP from on-premise to the cloud is a major change for most companies.
I think it is important here to mention, some companies will co-locating their on-premise servers with a hosting company. This is not what I mean when I say a cloud ERP solution. While it does provide a "cloud" solution, a "Co-located" configuration is more of a Citrix or Remote Desktop application. Generally, companies co-locate because of the support cost of hosting their solution internally, especially when forced to start virtualizing access.
With today's virtual business environment, we are seeing a shift in office based processes to virtual cloud based processes. This provides a virtual connection to strategic information from just about anywhere…with security. Cloud computing has proven and is continuing to prove the many advantages of its design.
Cost: When you consider the cost of on-premise management, investment, and version cycling of software, cloud based solutions are really a bargain. Years ago this was not the case, but now with the requirements of virtual access and field acceptance, the cost of maintaining an on-premise or co-located solution has sky rocketed.
Flexibility: Because the solutions are generally multi-tenant, or a hybrid, changes to configuration, application option implementation, backup, and more can be achieved quickly. Also, deployment, accessibility, and scalability are very easy tasks to accomplish.(Multi-tenant means one solution code set which allow the host company to make revisions and updates immediately to their clients)
Dependability: Once you move your solutions to the cloud, one of the first advantages you will start to appreciate is the dependability of the solutions. They just work….out of the box!
Field Ready: Cloud deployment of cloud-based ERP field applications are "plug and go". Most of the basic field functions like time capture, purchase request, RFP, RFQ are already configured and test for implementation.
Community Collaboration: Many of the cloud based ERP solutions have implemented, or will be initiating community collaboration functionality in the project management (to compete with Procore) and vendor portal functionality (to eliminate third-party accounts payable routing and approval systems)
These are a few of the main advantages we see with cloud based ERP. So you might now ask, what are the disadvantages?
Pricing: Unless you lock in your annual pricing, cloud companies will continue to raise the price of your subscription. While you cannot get a permanent price lock, you can negotiate a 5 year price.
Data Security: Most mature cloud ERP companies can provide you with their security maps and strategies. Make sure they can!!!!. There are companies who will short step this to achieve a better cost, leaving you with the exposure. Also, ask about their ransom mitigation. The last thing you want is to have to go through a ransom attack.
Down Time: You must make sure that your cloud ERP vendor is hosting your system on a dependable platform. Amazon and Microsoft Azure are a few of the more dependable platforms. They guarantee their uptime because of built in redundancy.
Your Internet Provider: The most important aspect for the home office is the speed of your internet provider. Make sure that you have a solid connection with as much speed as you can. This will insure adequate performance.
I will cover more on this subject in future Blogs, but for now we will close it here. If you feel like moving to a cloud based ERP solution, contact me at Jorco Consultants and we can assist you in the selection.