Lifting the fog around cloud ERP: 11 critical considerations shed light on your decision
The ERP landscape continues to change radically, as more and more traditional, on-site ERP vendors offer their solutions delivered via a cloud-based, software-as-a-service (SaaS) model.
SaaS ERP can provide a relatively inexpensive way for companies to streamline business processes and maintain that competitive edge. On-site ERP deployments require large capital outlays and specialized IT resources. ERP SaaS solutions offer economic advantages like minimal capital expenditure, less financial risk, faster deployment and quicker time-to-market that allow for a quicker return on investment because it offers
Despite the hype, cloud ERP is not a panacea – and on-premise ERP is not going away. Still, cloud is now a key consideration in any ERP strategy. When your system is at the point in the ERP lifecycle where you’re considering an upgrade or migration, it’s a great time to rethink your ERP strategy and consider SaaS ERP.
These 11 tips will shed some light on the cloud ERP decision process:
- Examine the differences between on-premise and off-premise ERP scenarios: On premise ERP; the software is licensed, installed at the customer’s site; plus maintenance. SaaS is most commonly delivered via the Internet in the cloud; companies pay monthly subscription fees.
- Get to know the infrastructure tradeoffs: Is your existing network infrastructure solid enough to handle running ERP in the cloud? Is your staff knowledgeable about cloud networking requirements? There’s a good chance you’ll reduce network costs. Other network-related issues include compliance, security and ensuring adequate bandwidth and Internet access.
- Understand the different types of clouds: The two major types of clouds are: private, for the exclusive use of an organization, typically managed by in-house IT; public, shared, hosted and managed by an external service provider.
- Consider a hybrid approach: Another option is for companies to use a combination of on premise and SaaS ERP. A recent Forrester survey of 2,403 IT decision-makers showed that 10% of planned implementations will use ERP SaaS to complement existing on premise ERP.
- Weigh cost considerations: The main reason ERP SaaS can be a very economical solution for small-and-medium-size businesses or start-up companies is relatively low initial TCO. Implementation, consulting and overall acquisition costs, along with the limited need for extensive IT infrastructure, make SaaS ERP an attractive option.
- Appreciate industry-specific requirements: Industries where there are highly complex operations may not be a good fit for ERP SaaS due to the level of customization that may be required. Recently, ERP SaaS adoption has picked up considerably in life sciences and other sectors that require strong compliance capabilities.
- Get the right level of control: You have to make strategic decisions about appropriate levels of control of your data, modifications, and configuration. The very nature of SaaS ERP requires you to relinquish control of software, maintenance and upgrades. But if you don’t like the service you receive from your SaaS provider, get rid of them and find another vendor.
- Ensure accessibility and reliability: Even though SaaS provides tremendous flexibility in terms of enabling users to access anytime, anywhere, SaaS access relies on Internet access. SaaS solutions have become very reliable. Reliable vendors have extensive disaster recovery plans in place so that quick restoration of data can take place in case of an emergency.
- Think about IT resource constraints: Even if you have the right skill-set to deploy ERP on-site, the number of resources required will be far greater than with a SaaS deployment. If you don’t have the in-house expertise required to undertake a potentially long and extensive on-site ERP deployment, SaaS ERP may be a better option for you.
- Know your customization requirements: SaaS ERP is best suited to enterprises that don’t want or need a high degree of customization. In industries where processes are very complex, you need to take this into consideration.
- Determine your need for speed: If quick deployment is high priority, then SaaS ERP could be a better option for you.