Cloud-based ERP, particularly software as a service (SaaS), has a number of benefits. It is generally less expensive to implement, requires no on-site maintenance or upgrades and is usually easier to customize and supplement with add-ons. Despite those obvious benefits, not every organization is ready for cloud ERP. The following tips should help you decide if SaaS ERP should be in your future plans.
- Can your current on-premise systems support it? – Even if your ERP vendor can promise you full retrospective conversion of your legacy ERP system into theirs, they may not be able to promise that your other software will integrate and play nicely with it. If other on-premise apps are not a problem or integration will be easy, cloud ERP might still be a good idea.
- Privacy and security – Some institutions, particularly those with financial data, may have very strict security protocols that work well with their on-premise implementations. They might not even want their on-premise ERP connected to or accessible from the Internet. With a public SaaS cloud, there’s no avoiding that extra security risk. You might, however, still benefit from a private or hybrid cloud model.
- Long-term vs. Short-term costs – The major advantage cloud computing has over on-premise deployments is that capital expenditure is generally much lower for the cloud. You may, however, have higher operational expenditure for your subscription services. Your monthly, annual or semi-annual fees will include maintenance, upgrades and support. To determine which is better for your organization, you will need to weigh total cost of ownership for each scenario.
- Implementation impact – How much data do you have to move to the cloud? If we are talking terabytes or even petabytes of information, the deployment will involve a lot of time and effort. Moreover, you will need to decide how much time you can afford to spend moving to a new system in the cloud, training users, etc. Whether the cloud works for your organization will largely depend on those details.
For some organizations, moving to the cloud comes easy, and they will reap the benefits and savings sooner rather than later. For others, it can be laborious, expensive and risky. If you do decide to move to the cloud, prepare carefully and make sure it is the right time to make it happen.