Cloud ERP is on the very pinnacle of Gartner’s vaunted “hype cycle”, and is progressing through the “slope of entitlement” phase with the cloud-borne enterprise market migrating core ERP deployments to the cloud at unprecedented rates.
Evaluating and contrasting viewpoints of different cloud ERP vendors, customers and analysts demonstrates the overwhelming preference of cloud-based ERP solutions in context of the following key driving factors:
- Reduction in Total Cost of Ownership (TCO): Typical cloud levers enable substantial reduction in TCO of advanced cloud ERP applications that would otherwise prompt high-tech IT infrastructure and expertise incurring significant CapEx and ongoing OpEx.
- Flexible infrastructure capacity: The agility in scaling resources in response to unpredictable and varying business circumstances and market demands enables critical competitive differentiation.
- Efficient provisioning of ERP applications: Efficient availability of new and customized ERP solutions based on specific operational requirements.
- Industry-specific requirements: Business users command vertical-specific ERP solutions readily available via cloud. Sererra provides tailored NetSuite ERP solutions for Rental Management, Event and Training Management, Repair Management and Fastener Distribution.
- Limited technical expertise and resources in-house: Organizations lack the necessary resources in supporting and maximizing the potential of on-premise ERP deployments.
- Cost variablization and Returns on Investments (ROI): Cost variability is central to the success of cloud-bound mission-critical ERP applications. Insignificant CapEx combined with affordable OpEx leads to highly justifiable cost structure and immediate returns on investments.
- Standardization: Cloud migration of mission-critical and core ERP applications aligns with organizational goals of consolidating, rationalizing and standardizing data centers and application deployments.
- Streamlined integration: Minimal concerns surrounding integration of advanced applications with legacy IT infrastructure on-premise when postmodern ERP solutions are delivered via cloud.
- Enterprise mobility enablement: Mobility is the key enabler to workforce productivity. Modern ERP solutions boast valuable cloud-bound mobility capabilities.
- Business continuity: With service providers responsible for the backend IT operations, disaster recovery and business continuity, end-users of cloud ERP applications do not require dedicate support and issue-resolution teams in-house.
The pace of adopting cloud-based ERP applications and migrating most of the existing ERP deployments to the cloud as part of a two-tier hybrid strategy has its own challenges. Unprepared organizations pushing for cloud migration of mission-critical ERP applications risk cannibalizing their business in pursuit of long-term rewards.
A well-devised ERP cloud migration strategy is based on ERP configurations, customizations, integration and implementation across the three pace-layers (system of records, differentiation and Innovation) of the ERP implementation program. Established core ERP infrastructure (system of records) is most resistant to change and defines the success factor in cloud transition programs.
Organizations pursuing the promised rewards of cloud ERP solutions should therefore evaluate and devise ERP cloud migration strategies in context of the following key considerations:
- Integration and Vendor Lock-In: Seamless integration of cloud-based ERP solutions with legacy IT and enterprise solutions from different service providers, hence eliminating concerns surrounding vendor lock-in and interoperability.
- CapEx and OpEx Trade-Offs: Long-term ROI must justify the CapEx and OpEx trade-offs with cloud ERP in comparison with on-premise deployments.
- Cloud ERP Readiness: Assess the available resources, IT infrastructure and functional requirements before embracing a new ERP system delivered via cloud.
- Application Performance: Lifting the entire server stack and shifting to the cloud without considering limitations surrounding bandwidth and data response time does not work.
- Security, Privacy and Data Ownership: Cloud transition of sensitive business information is inherently high-risk and speculative.
- Infrastructure Variability and Resilience: ERP applications and enterprise systems as a whole must perform smoothly despite significant variations and complexities in backend infrastructure.
- Geographic Limitations: Local laws govern policies regarding the use and limitations of data entering the geographic boundaries of different states and countries.
- Regulatory Compliance Requirements: Organizations are ultimately responsible for maintaining regulatory compliance regardless of the storage location of customer and partner information.
- Customer Considerations: Organizations must consider the impact of ERP cloud migration to customer information privacy, data security and service delivery.
- Supply Chain Concerns: Ensure reliable logistics and supply chain information with enhanced visibility and control.
- Service Level Agreements (SLAs): Careful assessment of cloud ERP SLAs to reduce risks and maintain profitability.
In context of the strategic business advantages and considerations regarding cloud ERP solutions, successful cloud migration of on-premise ERP deployments and long-term profitability with postmodern cloud ERP solutions prompts careful strategic planning and industry-proven implementation consultancy.