Some of the misunderstandings and misconceptions that still confuse conversations about the cloud have been around for years. On the other hand, certain trends and key benefits of cloud-based ERP that analysts and forward-looking businesses identified early on still hold. What can we learn from that? Always question and verify what applies to your business and usage scenarios, so you can plan to achieve realistic cloud benefits and don’t fall for any wrong-headed notions.
Three common misconceptions about cost, fit, and architecture of Cloud ERP
An ERP Cloud News article, Cloud ERP Software Perceptions, discusses three core concepts. The first one is that “Cloud software is less expensive.” Now as then, cost savings and efficiency are a major concern for the companies that move ERP and data to the cloud. It’s worth noting that ERP Cloud News takes a nuanced view of this and says that this perception is “somewhat true, but not for everybody in all situations.” You can incur savings because you may reduce your IT purchasing, don’t require data center investments, and might require fewer IT professionals onsite. That said, it needs careful planning to realize improved economies by taking to the cloud and perform data migrations and integrations efficiently.
The next notion mentioned by ERP Cloud News: “Cloud ERP is only for small businesses.” Today, this seems almost quaint, but remember that cloud technology from the leading providers has matured very quickly. The writer presciently points out that the scalability of the cloud makes it easy to extend ERP to very large enterprises as well, even though most of the early adopters were smaller organizations. With modern, powerful ERP in the cloud in form of Microsoft Dynamics 365, this is no longer a concern we hear much anymore.
Finally, the third idea, “The cloud is nothing more than hosted ERP.” Credit ERP Cloud News with being one of the first to clear up this common misconception, which one doesn’t hear much anymore today. Hosted ERP still relies on a traditional client-server architecture. You don’t need to install client software in a true cloud solution – you get at ERP capabilities through the browser. Also, hosted ERP typically works with an Ethernet connection, while true cloud just requires a simple, fast internet connection. Given these differences, security considerations for cloud and client-server environments are also very different.
Some analysts and writers have done a fabulous job of helping everybody understand the benefits and nature of cloud ERP and cloud computing in general. Don’t let common misconceptions cloud your view of the possible benefits.
Obvious and hidden Cloud ERP benefits in uptime, savings, supply chain management, and collaboration
An article published by Aberdeen Group, The Case for Cloud ERP in Manufacturing: Alleviating Outdated Concerns, was written just a few years ago – just as manufacturers and other companies were becoming more comfortable with the cloud and embraced it in growing numbers – and makes valid observations that still hold.
A third of the respondents interviewed for a survey wanted to reduce IT costs in the cloud, and almost a third hoped to make it easier for people in distributed locations to collaborate or workforce be effective across multiple time zones. More than half achieved costs savings as a major benefit, and exactly half helped their people in the world’s various regions and time zones work productively.
What I find very interesting in the Aberdeen piece is that 85 percent of the people surveyed mention that supply chain management is one of the top lines of business to benefit from cloud ERP. This is something we like to encourage when we work with clients at Sikich; the potential advantages of improving supply chain management are not always top of mind when companies consider ERP in the cloud.
As regards the cost advantages of ERP in the cloud, we also see that companies and their cloud service providers achieve much higher availability of cloud than on-premise ERP, at a lower expense. As a result of the infrastructure building and security measures taken, for example, by Microsoft for the Azure cloud, ERP without interruption in the cloud is more affordable and uptimes are better than what many companies realize on-premise.
We work with businesses of all sizes that look to the cloud to support collaboration across business locations, time zones, and organizational boundaries. They also accommodate increasing numbers of mobile and remote users, providing cloud access to ERP functionality and business data. In modern cloud technology, it has much easier to ensure the security of mobile and remote access. And, don’t underestimate the value of happy, efficient users who can get their work done wherever they happen to be. Contact us to learn how cloud ERP can benefit you!