Today’s new enterprises can accelerate quickly and remain agile by adopting subscription-based business apps delivered through the Cloud. Businesses no longer need to own their systems, they simply use them. This new approach threatens to leave behind companies tied to more established, on-premise software. Additionally, the size of these software applications combined with the extent of their customer bases and distribution networks can make it difficult for providers to move to a new delivery model. Rather than investing in true Cloud development, many established software providers have chosen to host their old solutions online, even offering subscription-based pricing, so it is becomes difficult to distinguish true, “Born in the Cloud” solutions from imitations. Does it actually make a difference?
Pre-Cloud software providers have extensive customer bases which have paid up-front licence fees and installed expensive IT infrastructures to run their systems. Unsurprisingly, those customers feel they have made significant investments and want stability. These on-premise solutions are often well-embedded in the business and are therefore difficult to replace. In response to the market trend towards the Cloud, software providers can choose one of two product development paths: the more pioneering will develop brand new Cloud-based applications; others will simply move their aging technology onto a hosted server and offer it as their “Cloud version”, desperate to extend its life while giving long-serving users a sense of progress.
These pseudo-Cloud imitations may look like Cloud products, some even have browser-based input screens and may even offer payment terms that are akin to monthly subscriptions. Although these solutions free the business from having to maintain on-premise hardware, the software users are simply leasing the asset and they will never be able to deliver the additional benefits of a true Cloud application.
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What will a True Cloud product deliver for your business?
Firstly, real Cloud apps are truly anytime-anywhere services with the provider looking after everything to do with delivering the service 24/7 including hosting, backups, disaster recovery, ongoing upgrades, scaling the platform as you grow, ensuring full failover resilience etc. However, the real benefits of Cloud is in what is still to come. It is the futureproof platform of choice for businesses that are growing and want to adapt to change frequently and in an agile way. The ability to scale and adapt with the business, allowing new locations or business lines to be added easily, demands a system that can equally adapt and change and won’t require you to wait for hardware or software to be installed – it will simply need to be switched on.
Cloud is now so prevalent that it’s a no-brainer to have a Cloud strategy of some kind in place, but how can you be sure you’re making the right buying choices when it comes to business-critical software? Apart from agility and future-proofing, let’s look at some of the main functional differences the Cloud facilitates.
Integration – the key to efficiency in business processes
Pre-Cloud, if businesses wanted to achieve greater efficiencies by merging data and processes, they looked for ERP solutions that purported to deliver all the functionality they needed in one, integrated platform. These ERP solutions were very costly to buy and even more costly to implement. Where the ERP solution was too costly or didn’t meet the requirements, the next option would typically involve a specialist software reseller writing a piece of customised middleware to run on a server allowing two systems to exchange data, often only in one direction. This was often cumbersome, relying on files being extracted from one system, passed across in batch form with a program running to update the changes or transactions in the other system. When changes happened to either system, the middleware would require modification. Either of these were costly upfront, with ongoing support costs.
True Cloud products come with what is known as an Open API containing a library of “webservices” or “methods” that can carry out various updates from any other system via an authenticated Cloud transaction. These are effectively pre-packaged integrations that can be reused by any other Cloud app with the relevant authority. Integrating with a new application is simple: using a secure partner key, any third party system can access another Cloud system to perform an automatic, two-way data exchange. Once an integration has been completed, it can be published in the Cloud to be accessible to other systems and is automatically updated as the Cloud-based system evolves.
ERP Vs. Best Of Breed
In the context of the Cloud, this old debate takes on a new perspective. ERP solutions are still expensive to buy and implement and there is usually a compromise on the functionality in some modules versus the best available. Enterprise Resource Planning (ERP) means different things to different businesses: in retail it’s EPOS combined with finance; in hospitality it’s reservations combined with finance; generically, it can be finance combined with HR and sales databases. Businesses are developing unique business models that are more difficult to address with generic ERP solutions. Cloud delivery and easier integration means businesses no longer need to spend large sums or compromise on functionality to get fully-integrated solutions. Each business function can pick the system that works best for it and, if data needs to pass from one to the other, they can be integrated to avoid re-keying and errors.
Continuous improvement – automatic upgrades
Another big benefit the Cloud offers is automated software updates; the latest version is always available for every subscriber. The concept of true Cloud accounting is that every user accesses the same system, with upgrades made at source and automatically available to all users.
Upgrades to on-premise or pseudo-Cloud applications can be tricky and expensive. Many providers stop supporting older versions and force an upgrade path that can involve significant implementation work to apply the upgrades, involving data conversions and retraining. They can be incompatible if extensive customisation or server-based integration has been done and may require hardware and operating system upgrades.
Which route will you choose?
The business landscape is moving fast and demands that businesses remain flexible and agile. Change is difficult so remaining with your existing system may seem the easy option. However, Cloud opens up a whole new world of possibilities that can be adopted without considerable upfront investment and can scale and flex as your business grows and develops. If you want a more viable, long-term solution, look for apps which are truly in the Cloud.
Tony has over 26 years’ experience in designing and implementing business systems and founded AccountsIQ in 2007. He sits on the IT Advisory Committee of the Institute of Chartered Accountants of Ireland and was a founding member of Business Reporting Ireland. He is a non-executive director of several technology companies and has vast experience advising the IT sector on business strategies.