On-premise Enterprise Resource Planning (ERP) software has earned itself a reputation for being expensive, time consuming and inflexible. Until recently however, many CIOs would have felt that moving a business critical solution such as an ERP system to the Cloud was too risky, because of concerns that the Cloud couldn’t deliver the reliability, speed, and security needed for such a crucial system.
But as trust in the Cloud increases and disruptive competitors emerge in almost every industry, CIOs are exploring if ERP in the Cloud can help give them the business agility and flexibility they need to stay competitive in today’s fast moving and ever changing business environment. So what are the potential benefits and challenges for organisations considering ERP in the Cloud?
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Improved agility and scalability
For CIOs considering a move to the Cloud, the main drivers are improved business agility and scalability. Today’s businesses need to be able to accommodate and adapt to changes in the business environment, including responding to threats from nimble start-up competitors, by being able to scale up and down according to the needs of the business. Improved agility and scalability means that ERP in the Cloud is also ideal for businesses looking to set up a new office or quickly deploy to new markets oversees as the need for additional hardware is removed and the associated implementation effort is significantly reduced.
Enabling enterprise mobility
For organisations concerned with improved enterprise mobility, particularly those that embrace bring-your-own-device policies (BYOD) for smartphones and tablets, ERP in the Cloud is a great enabler. Cloud solutions allow for easier and faster mobile application management and integration, no matter the operating system or whether the device is corporate owned or BYOD.
Reduce in-house IT support
In addition, ERP in the Cloud reduces the need to have a large IT support resource in-house, as well as the costs associated with running your own data centres. It provides the resource allocation flexibility that comes with avoiding large upfront investments in the early phases of deployment. It also means that businesses will have access to the latest software capabilities and regular updates instead of larger disruptive updates every few years.
Improved collaboration
Improved collaboration is also an important benefit of moving ERP to the Cloud as it becomes much easier to collaborate with staff internally, as well as with partners and clients externally. For example, a retailer may need to work closely and plug in (integrate) numerous external partners to its supply chain.
Trial ERP in a ‘lab’ environment
Forward-thinking organisations are investing in ‘lab’ environments to trial new tech. The Cloud makes testing different scenarios or processes, customisations and prototyping possible. All of which can be done quickly and could be a great tool for CIOs in helping them to decide whether or not moving ERP to the Cloud is right for them. Organisations can see how this would work for them by using preconfigured industry template models and testing them on their own business. By testing ERP in the Cloud in a lab style environment, businesses can gain a better understanding of the impact this would have if they were to roll this out across a line of business or their entire organisation to help them make the right decision.
Looking forward to the Internet of Things
A move to the Cloud should also be considered in terms of what it can enable in the future. For example, the Internet of Things (IoT) is a growing area of focus for many CIOs and getting a handle on the ever increasing amount of customer data which has the power to tell you more about your clients and how they are using your services will be crucial. ERP in the Cloud is an enabler for this as it provides the flexibility and scalability to be able to collect and analyse increasing streams of data in real-time. ERP in the Cloud can assist with collecting, cleansing, and analysing an organisations data and turn that into the intelligence that organisations need to better serve customers. Using ERP to collect and analyse all of those data will lead to better, more proactive relationships with customers and enable the development of new business model and service offerings.
Consider the journey to Cloud
The challenges and complexities of moving an organisations ERP system to the Cloud should not be underestimated. Careful consideration of the journey from its existing ERP solution to its future state needs to be given not just to the technology change but also to the impact on the people and processes within the business. Implementation partners will be able to help you plan for these changes, whichever stage you are at on the journey to Cloud. Organisations will still need to go through the single biggest task associated with any ERP implementation; data migration. In addition, integration with existing on-premises technology will still need to take place which can be time consuming and challenging. Having said that ERP in the
Cloud will accelerate development and deployment considerably in comparison to on-premise.
Is it right for your business?
While moving to the Cloud may be the right step for some, every organisation is unique, has different business objectives and is at different stages in its life cycle. For relatively young and fast growing companies which do not already have an existing ERP system, ERP in the Cloud is likely to be the ideal choice. For others the decision may not be as clear cut and will depend on your individual business objectives.
The decision to move an enterprise wide, business critical system such as ERP to the Cloud should be well considered, thought out, explored and tested out on your own business processes. The potential benefits particularly around agility and scalability make moving ERP to the Cloud a worthwhile consideration for everyone. Implementation partners should be able to work with you to test if ERP in the Cloud can help meet your business objectives and help you on the journey to deciding if Cloud is right for your organisation.
Tim Rowe, Director, Hitachi Solutions Europe
Tim's experience gained at PWC, Microsoft and now Hitachi Solutions enables him to build confidence with key business stakeholders to ensure modern, cost effective technology solutions are delivered. He has a particular interest in new and innovative ways of working and is passionate about how the Internet of Things (IoT), mobile apps and Cloud can radically improve ways of working and the business environment.