By: Kerrie Jordan
Your enterprise resource planning (ERP) solution is crucial to running a successful growing business. While many companies are now moving to cloud-based ERP solutions, others might not be ready to move off on-premises deployments.
Wherever you are on this consideration scale, here’s what you need to know to guide your ERP deployment decisions, both now and in the future, says Kerrie Jordan, senior manager of product marketing at Epicor Software.
What is driving increased cloud ERP adoption?
Organisations want to see value from their technology investments and they don’t want to wait for implementations that take a year or more to see that value manifested.
Nucleus Research, in a December 2017 report, stated that cloud deployments deliver 3.2 times the return on investment of on-premises deployments. This is notable and extremely significant, especially to C-level executives who are increasingly part of the ERP selection process.
Cloud ERP is quickly levelling the playing field, enabling even smaller businesses to rapidly leapfrog older, more established companies, and that is very compelling.
In the past, businesses considering cloud ERP were attracted by the cost benefits. The ability to consume ERP on a monthly subscription basis offered businesses the ability to leverage opex as opposed to capex, and eliminating the responsibility for businesses to run and manage software applications and invest in servers and infrastructure.
But, aside from bringing about improvements in responsiveness, agility, and costs, the cloud is helping businesses digitally transform and get fit for growth. As businesses shift away from traditional on-premises systems to cloud-based ERP, they are taking advantage of new capabilities to improve their business and optimise processes. What’s more, it’s enabling teams to access real-time information from across the business and use that data to make better business decisions.
Are customers still concerned about security implications of cloud ERP?
Understandably, security will likely always be a concern, no matter how far technology progresses, but companies need an insight-driven strategy to outpace ever-evolving threats. The reality is all software is prone to viruses and vulnerabilities, whether it is stored on-premises or in the cloud.
Having your ERP in the cloud offers several security benefits that could outweigh on-premises options for your business. Your ERP is automatically upgraded by your ERP vendor more often, so you are constantly and consistently safeguarded with the latest security patches. World-class global cloud infrastructure now uses the latest in artificial intelligence and machine learning to detect and remediate vulnerabilities at scale even before they are exploited. Physical data centre security for world-leading cloud platform providers is so strict and technology-driven, it would be extremely costly for a single business to try to replicate that on their own premises.
Epicor Software encourages businesses to be educated on cloud ERP and security, and not just to subscribe to the myths that if you’re running your ERP in the cloud, your data is more susceptible. It’s absolutely not true. The cloud is likely more secure than what many can realistically provide in-house.
How can cloud ERP help companies be successful with digital transformation?
The speed of technological change can intimidate many companies, especially those in the small to medium range, because of resource constraints. Digital disruption is a pervasive trend with significant implications for ERP. Most organisations know “business as usual” no longer exists, but the sheer pace and the invasive nature of digital transformation can be overwhelming.
One of the biggest benefits of running ERP in the cloud is that it can help prepare your business for future changes via its inherent scalability and flexibility, particularly from an integration perspective. This is essential as companies look ahead and consider future needs. For example, might an acquisition or merger come into play? Will growth plans include a global or national expansion strategy? Will new machinery, robotics or Internet of things (IOT) initiatives be initiated? In all these scenarios, cloud provides ease of integration, to help connect people, processes, data and things.
As well, the new requirements of today’s digital age go beyond driving transactions. They require organisations be able to make sense of large volumes of data quickly to understand the greatest business opportunities and threats that must be addressed to support growth and profitability.
While ERP has always been associated with efficiency, today and going forward it’s more about delivering intelligence, insights, and predictability to sustain competitive advantage well into the digital age.
This enables organisations to continue to fine-tune their go-to-market strategies, customer management (identify the most profitable and not so profitable customers), inventory management (change the assortments and weed out items that are not selling), and financial health (better AP/AR management). What’s more, the use of data and analytics is a powerful force in helping organisations anticipate and navigate disruption. Companies that can turn data into action will enjoy a significant advantage over slower moving rivals.
How do companies make the choice between cloud or on-premises ERP? What are the key considerations?
We see more businesses adopting either a cloud or hybrid approach to ERP as they start to understand the need for an infrastructure that enables them to deploy new technologies. This includes mobility, as well as collecting, aggregating, and analysing data.
The momentum of the cloud is unstoppable, but like any investment, cloud ERP requires proper due diligence. How and when you get there should be personalised to address the needs of your business for the greatest return on investment (ROI).
Many companies investing in ERP for the first time choose cloud to avoid the future transition. A growing trend among organisations with on-premises ERP is to start their cloud journey by adding specific cloud products (such as e-commerce or analytics) as satellites or complements to their core systems. Whatever your strategy, a phased approach allows you to design your own path to the cloud, where you can move higher priority areas of your business first to gain rapid ROI, revenue growth, and data-driven justification to expand.
When considering your variety of options, be sure to choose an ERP vendor that empowers, rather than restricts, you to chart a course to the cloud that best serves your business, without the concerns of losing mission-critical functionality, data security, or performance when you move. Do the ERP solutions fit your business? Are they easy to use, deploy and extend? How will they enable you to achieve your growth goals? No matter how or when you choose to move your ERP solutions to the cloud, partnering with a reliable ERP vendor and pursuing a future-oriented cloud strategy is critical to remaining competitive in our digital world.