Moving Your ERP to The Cloud: Some Facts to Consider

Posted by James on August 2, 2016 at 3:00 PM
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ERP in The Cloud

Whether for personal or business use, everyone seems to be moving their computing systems and data to The Cloud. So it's natural for companies to ask, "Should we move our Enterprise Resource Planning system to The Cloud?"

First of all, The Cloud isn't one thing. Depending on your chosen ERP system, you'll have multiple options, from full-function Software as a Service (SaaS) solutions to cloud-based hosting services. The primary question is whether a company with an existing, on-premise ERP system should feel compelled to move to a cloud computing solution now or, instead, consider moving when replacing it's exsiting ERP system.

Some facts to consider

  • Cloud computing is a deployment option, meaning that, when done right, the fact that the system has been deployed in The Cloud is invisible to the system's users. However, the choice of location may have a profound effect - positive or negative - on your IT department. Ultimately, if you have decided to change ERP systems or implement one for the first time, the decision about cloud deployment strictly concerns the financial and IT departments.
  • Select ERP software that best fits your company, and only then consider deployment and infrastructure options. Most ERP solutions are available in a variety of deployment configurations including cloud-based SaaS, cloud hosted, and on-premise. However, some systems have limited options. You choice of software will help narrow down the alternatives available to you.
  • Cloud-based solutions don't necessarily cost less - or more - than conventional, on-premise deployments. Rather, cloud computing can shift the nature of costs from capital expenses to operating expenses. You can roughly equate the options to owning, leasing, or renting. As you would do with any other capital expenditure, compare the cost of ownership over a reasonable time period (five to seven years, say) to see a true comparison of costs.
  • A potential move to The Cloud will require your IT department to address some technology trade-offs including security administration, access control, application availability and communication speed, communications infrastructure, and so on. These are all elements of your company's strategic technology posture. Remember, ERP deployment is just one component of that broad strategy and should be made in the context of overall IT plans.
  • Along with IT decisions come HR concerns. Staffing and allocation of IT resources will be different depending on your cloud computing decision. Even before ERP solution selection is complete, make sure that your HR people are prepared for whichever deployment choice takes center stage.
Here's the primary take-away: ERP application fit and implementation partner choice are the most important decisions you will make regarding system success. Technology deployment is secondary. Cloud computing has become a popular approach for deployment because it offers alternatives that fit many companies’ financial and technical needs. Still, it is not necessarily the best approach for every company, application, or financial position.

Topics: Cloud Computing, ERP

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