Tag Archives: Cloud ERP

On-premise vs Cloud vs Hosted: What’s the difference?

This post helps you understand the difference between cloud, on-premise and hosted private cloud ERP implementations, including the pricing and why you might choose one over another.

New technologies have increased your options when it comes to how you’ll deliver the software you need to run an effective business. The range of choices and technical jargon can create confusion for decision-makers, especially when you’re undergoing a significant digital transformation such as implementing a new Enterprise Resource Planning (ERP) solution.

Let’s break it down, and explore the three main options.

Key differences between cloud, on-premise and hosted ERP deployments

On-premise ERP

On-premise is the traditional way that people have purchased and used software. You pay the total cost up-front and receive a product that you own the licenses to and is installed by your ERP provider and run on your own server. You need to own and manage your physical computer server or servers internally, and complete all the back-ups and upgrades to the software. On-premise software can be set it up so users can access it online and remotely.

How it compares on…

Technical deployment: Your ERP provider will install the software licences on your own office-based server. On-premise installations can overcome barriers such as slow or unreliable internet. You also need to maintain your server, which means you need access to technical expertise.
Cost: Often requires a large upfront capital expenditure to purchase the software and implement it. But there are no continuous subscription fees. You’re also responsible for all ongoing costs of managing the security, maintenance, and replacement of your server/s.
Software functionality: Your ERP provider will apply updates and patches to the software. The software is less scalable: if you need more bandwidth or users you may have to invest in more servers.

Cloud-based ERP

Cloud-based is a more modern and increasingly popular approach where a business pays a subscription to use software, which is made available to them online via a server that is owned and managed by the software vendor. Cloud computing means the server infrastructure, security, data integrity, backups and updates are all managed by the vendor.

How it compares on…

Technical deployment: It’s generally faster and simpler than an on-premise deployment. There’s no need for expensive, on-site infrastructure.
Cost: The prevalence of the cloud-first, Software as a Service (SaaS) model of software and efficiencies of scale it enables for vendors, makes it a more cost-effective option. Many businesses appreciate being able to pay monthly for their software subscription using operational expenditure. You also save on IT management and support costs.
Software functionality: It’s easy to create and build on a mix of integrated functionality, or increase the number of users – helping you scale your business faster if you grow or expand overseas. Updates are automated meaning your software remains current and highly functional.

Hosted ERP

Private hosted cloud means your software (whether you opt for a perpetual license or subscription) is accessible in a cloud environment that dedicated exclusively to your business, via servers hosted and managed either within your company (on-premise) or by an outsourced vendor. This provides the benefits of cloud computing but allows businesses to retain greater control over things like when to implement upgrades.

How it compares on…

Technical deployment: Private clouds are a more complex deployment because you either need to set-up virtual private cloud hosting, or have your own proprietary infrastructure on-premise to create a single-tenant cloud environment. You’ll require access to IT expertise to successfully implement and maintain a private cloud.
Cost: Because your cloud environment is private you will pay more than you would for a public cloud, especially if you need to maintain your own data centres. Added costs will depend on the level of support you require from your virtual private cloud hosting provider.
Software functionality: You can access all the real-time workflows and data-sharing, self-service and scalability that come with having applications available in the cloud.

Cloud vs On-premise vs Private Cloud Security: a comparison

It’s a persistent myth that cloud-based software is less secure. Leading ERP software vendors like SAP, Sage and MYOB are large and innovative companies whose success has been built on a commitment to delivering top-notch, secure cloud infrastructure, and hefty investments in research and development.

While cloud-based systems significantly reduce the responsibility for managing IT within your business, they don’t significantly reduce the quality of IT management your business can depend on when it comes to the security of your ERP software and business data.

It’s an irony that having greater control over your server or data centres via an on-premise or private cloud deployment can actually make you more vulnerable. Ownership of your own infrastructure does not negate the risks of cyber attacks or downtime—it simply increases your organisation’s control and accountability. You need to have high levels of confidence in the people and systems you rely on to keep your on-premise infrastructure secure and well-maintained.

How to choose between cloud, on-premise or hosted?

It’s easy to see on the face of it how a cloud-based ERP solution could be more appealing because it reduces the resources you need, and increases the flexibility with which you can access functionality and your data. The majority of our clients prefer a cloud-first approach.

Cloud-based software is multi-tenanted, which means multiple companies run the same software side by side (although their data remains private). Conversely, a hosted private cloud has a single tenant—your business. That makes it ideal if you have an especially complex implementation, stringent security needs, or sensitive data: but you will pay a premium for the privilege.

An on-premise implementation can make sense for some companies, especially those that prefer to have more control over costs and their IT infrastructure. Limitations posed by patchy internet access can also make on-premise more suitable in some cases.

Cost is always a factor, but remember that regardless of which option you choose—you will still need to make an additional investment to ensure the successful implementation of the software, and any development work associated with customising the software for special use cases.

[FEATURE ARTICLE – Addressing cloud-based ERP implementation costs]

Conclusion

Ultimately your decision should be based on what will work best for your business by considering the pros and cons of each deployment option against factors including your budget, internal resources and future growth plans.

It can help to ask yourself:

What option best matches my internet and infrastructure capabilities?
Do I have, or want to continue to invest in, significant internal IT skills/resources?
What’s the best payment option, given my budget, cash flow or tax considerations?
How flexible and scalable does my system need to be to match my evolving business model, talent management approaches, or strategic plans to enter new markets/countries?

If you need more help weighing up the pros and cons of different ERP software deployment methods you can talk to an experienced consultant from Leverage Technologies. Call 1300 045 046 or email [email protected].

ERP of the Future: 2018 Top Trends in Enterprise Resource Planning

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Enterprise Resource Planning has evolved appreciably over the past decade or so. It’s very advanced today, and it continues to grow into a versatile, scalable, and multi-faceted resource that businesses of all sizes may leverage to catalyze performance enhancements in the value chain.

Our predictions for the top ERP trends to track going forward

After having implemented ERP software for small and medium-sized businesses for over a decade, we believe that the top innovations will come in the following areas.

#1 – The Internet of Things (IoT)

IoT is the digital connection or networking of otherwise independent devices or systems, such as cars, assembly lines, and electrical equipment. By feeding real-time data on product usage, performance, or technical problems into a centralized ERP database, IoT provides the insights required to improve quality, streamline production processes and lower costs, customize the customer experience, or manage logistics more efficiently.

IoT lends itself to various outcome-oriented service models. In consumption-based insurance, for instance, the provider uses vehicle-installed software to track mileage and monitor their customers’ driving habits. The system sends the information to the insurer’s business management solution autonomously, enabling them to calculate monthly car-insurance premiums for a customer based on usage and risk assessment.

#2 – Software-as-a-Service ERP

Many businesses are no longer finding in-house legacy ERP financially or operationally tenable. They’re progressively shifting to SaaS ERP to reduce the total cost of ownership (TCO). The approach eliminates the bulk of capital injections associated with acquiring major tech solutions for business.

SaaS enables companies to deliver a host of ERP applications to end users, such as employees and suppliers, via the cloud. It provides access to data and user interfaces or portals through any internet-connected device. With the ability to work from any location with internet access, employees can build greater adaptability and responsiveness to dynamic demands of their official positions.

The model allows companies to scale, upgrade, and switch between applications without investing in new hardware. They may introduce new software to the mix as needed, including CRM, talent management, or inventory control, and still, keep the benefits of cloud ERP integration.

#3 – Artificial Intelligence (AI) and Machine Learning (ML)

Through machine learning, ERP solutions can become smarter to the point of predicting future business opportunities and risks without human intervention or explicit programming. For example, ML algorithms may incorporate real-time data from various internal and external sources, enabling organizations to work out production costs and avoid setting loss-making prices for their products.

AI will play a critical role in enabling ERP solutions to make decisions autonomously. It’ll reduce human intervention to just passive supervision, allowing decision-makers to commit more time to value-added workflows.

To make it work, an intelligent ERP first records user input and the ensuing sequence of actions. Its built-in ML capabilities enable it to draw from historical data and to provide viable recommendations. With time, the system learns to make the right call every time without user input.

#4 – Big Data

Primarily, ERP utilizes a centralized database to support a broad spectrum of business functions. However, companies need much more than structured data to understand their markets, personnel, and customers better. Big data analytics helps these organizations decipher the sheer chunks of structured and unstructured data flowing in very fast from both internal and external sources.

For instance, in customer relationship management, big data enables marketers to extract and analyze data from sources such as social media, contact centres, and sales to enhance customer service, predict demand trends, and calculate ROI on several marketing initiatives.

ERP with Big Data capabilities can also help recruiters with talent acquisition and management. Such a system extracts invaluable job market insights from job boards, social media, and HR systems, enabling employers to meet their staffing needs.

Is your organization well-positioned to leverage ERP systems of the future? Powered by ML algorithms, AI, and IoT, the business management solutions are getting smarter and more versatile. Talk to us today about implementing best in class ERP software for your business!

Interpreting ERP Investment Proposals: Are You Comparing Apples With Apples?

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ERP investment proposals can vary greatly even for the same project.

If your business is considering implementing an Enterprise Resource Planning (ERP) solution you might be wondering why there is such a substantial difference in price between the ERP investment proposals provided by different companies.

After all, your business’ requirements are unique and clearly defined. So, where exactly does the difference in price come from?

Here is our advice on understanding the differences between ERP investment proposals from various solution providers so to always compare apples for apples when it comes choosing the best fit for your business.

Receiving the perfect ERP investment proposals: It all starts with your requirements

First of all, it is highly likely that you will be considering multiple different ERP solutions and possibly different providers, including resellers and implementation partners of the same solution. Analysing different solutions gives you the ability to compare what’s available on the market:

Cloud vs On-premise;
Different user interfaces, look and feel;
Generic vs best of breed solutions;
Different functional solutions;
Alternative implementation and support options;

Let’s explore the key reasons why you might get very different proposals, at very different price points from alternative ERP solution providers.

#1. Are you comparing similar ERP Solutions?

ERP Solutions vary greatly in complexity and functional “footprint”. The more functional the ERP solution the longer and more expensive (consultancy) will be to implement the solution. Greater “standard” functionality is a double-edged sword – more functionality to use and more to implement.

More functionality requiring implementation will stretch out the time to deliver and will cost more in consultancy dollars to get the job done. Generally speaking, ERP solutions are available in tier one, tier two and tier three markets. Make sure that the solutions you are comparing are fit for purpose (there is a strong functional footprint that aligns closely with your requirements).

If you are not comparing similar solutions you are likely to see a substantial difference in investment required. This is particularly true of implementation pricing which varies vastly between tier one (Enterprise Solutions for large multi-national organizations), tier two (Mid-market ERP) and tier three solutions aimed at smaller businesses. We are often contacted by companies comparing five different ERP solutions, two from the mid-market (tier two) space and three from the small end of the market. This is not comparing “apples with apples”. In summary – when comparing investment summaries make sure that you are comparing ERP Solutions from the same “tier”.

#2. Implementation methodologies vary greatly

Is the ERP implementation partner offering a fixed price or a “do and charge” implementation? These two different approaches will yield quite different investment requirements. A waterfall approach assumes a fixed scope / fixed price implementation. An agile methodology is a “fits like a glove” build and consult on an “open budget” basis. Two very different approaches that will yield two very different budgets and ERP investment proposals.

#3 Assumptions are being made

When providing a proposal for the implementation of ERP solutions, your implementation partner has to make certain assumptions which will affect the ERP investment proposal.

Some examples of such assumptions include:

Availability of internal IT resources;
Current data formats and the “state” of current data from legacy systems;
Internal (company) project management resource;
Technical experience of team members;
Functional requirements (even after a scope of works there can be some areas that are not 100% clear).

How do the assumptions that your implementation partner makes affect your ERP investment proposal? Let’s use data conversion as an example. Data will need to be exported from legacy systems into your new ERP solution. In theory, this is straightforward:

Extract data from legacy solutions;
Put the data into Excel or Excel type templates for “checking”;
Use technical data upload routines within the ERP application to upload data and run data integrity checks;
Reconcile the data for accuracy.

Sounds easy and it can be. But, data transfers can also be complicated and affect the pricing of your ERP project. Factors which can have an effect on the consultancy time needed to upload data from legacy systems include:

Number of data sources;
Availability of internal technical expertise;
Status of legacy data (how “clean” is the data);
Are internal resources available for data checking and reconciliation?
How well has data been maintained?
How well do staff members understand the data?
Data volumes;
Data transfer requirements – for legal reasons (for example warranty or traceability requirements).

The answers to each of these questions will have a substantial impact on ERP implementation pricing. If one provider of ERP makes the wrong assumptions, they might provide a very different proposal to someone that has done their homework correctly and understands exactly what is required to convert your data.

A good ERP provider takes into account all of these factors to ensure an accurate investment proposal.

#4. Has the scope of works been correctly reviewed?

Providing an accurate implementation proposal for ERP requires an accurate assessment of scope. Two different providers might have different views on the scope of the project and can provide two very different proposals for implementation.

Conclusion

Many companies have a hard time interpreting the variance in pricing from different ERP proposals. Your ERP investment proposal can vary due to factors such as the solution being scoped, the assumptions of your implementation partners, the methodology being adopted and more.

Correctly implemented ERP solutions provide improved cash flow, increased customer satisfaction and happier team members. Evaluate potential providers and their proposals carefully to ensure that you make the right decision for your business and also make sure that your providers understand your requirements and lay the right assumptions for scoping your project.

At Leverage Technologies, we help Australian businesses find and implement the right ERP solution to grow smart. For more information or to speak to a consultant call 1300 045 046 or email [email protected].

Sage Enterprise Management Cloud Vs On-premise: Your Rollout Options

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Should you implement Sage Enterprise Management Cloud or On-Premise? After you choose Sage Enterprise Management as your ERP software solution, you now want to decide whether to implement it in the Cloud or On-premise.

The good news is that the options are certainly there for you! In this article, we are going to explain some of the differences and considerations you need to make when evaluating the two options.

First of all, why are so many companies moving their ERP software to the cloud? When compared with an On-premise setup, the Cloud makes perfect sense. Think about the following benefits:

Reduced upfront cash flow requirements;
No need for expensive hardware and infrastructure;
Quicker deployment of ERP and outsourced maintenance of the on-going requirements associated with security, infrastructure and back-up;
Gain access to scalable computing power (more computing power than ever before);
Pay as you use.

Sage Enterprise Management Cloud Vs On-premise

Sage offers you, the customer, choice. When considering Cloud ERP vs On-premise there are a number of factors to consider:

Current infrastructure;
On-going OpEx vs CapEx costs;
Internet speeds and reliability;
Functional requirements.

As an ERP software solution provider, we believe that the Cloud or On-premise deployment choice should be made by the customer, not the vendor.

Yes, there are multiple advantages to moving your ERP software to the Cloud but there might be specific reasons preventing you from doing so or you might have done the maths and you might be of the opinion that an On-premise ERP makes more sense for your business.

Sage Enterprise Management, offers all of the technology that you expect from a modern ERP solution:

Cloud
Mobility
E-commerce
Web client

In fact, Sage Enterprise Management was an early adopter of web client architecture for ERP, leading the way for Cloud and browser independent remote access from anywhere.

I am a huge fan and supporter of Cloud ERP solutions but let’s not forget that the Cloud is not always right for every business. We can still access Mobility, eCommerce and Big Data analytics from an On-premise ERP solution. As stated earlier, there might be specific reasons for still considering an on-premise solution.

Your deployment choices with Sage Enterprise Management

Here are some of the deployment options offered by Sage for your Sage Enterprise Management ERP software.

Traditional On-premise. Purchase your server, use your existing infrastructure and stay on-premise. In this instance your Sage Enterprise Management licenses are “purchased” and you pay an annual maintenance and support plan to cover your day to day support requirements.

Pros: There is a lower on-going software investment. Most of your software investment is made upfront with the software “purchase”. When calculating investment of On-premise vs Cloud you should consider all costs – hardware, IT resource, back-up and network costs.
Cons: This type of purchase requires a bigger upfront investment. – Maintenance of infrastructure requirements can prove expensive and time-consuming.

Private Cloud. At Leverage Technologies can provide private Cloud options. These private Cloud options include the ability to do an upfront software “purchase” and pay an annual support and maintenance fee or alternatively pay a monthly Software as a Service (SaaS) fee. This is often referred to as a hybrid model. Your Sage Enterprise Management Solution is hosted in the Cloud on infrastructure that is outsourced (you pay a monthly fee). You have access to your own Cloud environment, hence the term “private” cloud.

Pros: All of the advantages of a multi-tenant Cloud (public Cloud) offering. Easier access to specific development tools and customization. Upgrades can be timed to your specific requirements because you have your own environment you can decide on the timing and planning associated with system upgrades. This is particularly useful if you have multiple developments or integration requirements.
Cons: Will be a more expensive option than multi-tenant Cloud.

Multi-tenant Cloud. You are sharing secure infrastructure with multiple other companies.

Pros: Automatic upgrades (reduced on-going cost of ownership), lower monthly fees, no need for your own expensive infrastructure, back-up and security are world class.
Cons: On-going cost of ownership should be compared to other available options (on-premise and private cloud). Remember, as stated earlier, when comparing the investment requirements of on-premise, private and public Cloud one should compare all relevant costs – infrastructure, upgrades, IT staff and security.

Conclusion

As consumers we love choice, so why should ERP be any different?

With an ERP solution from Sage you, the customer, can choose a world class ERP solution with the deployment option that works best for your business.

Whether it’s a traditional On-premise setup, private Cloud or multi-tenant Cloud, Sage Enterprise Management give you the solutions for setting up your ERP the way you prefer.

At Leverage Technologies, we have helped numerous Australian companies understand the various options and implement the solution seamlessly. For more information on the ERP options offered by Sage call us on 1300 045 046 or email [email protected].

Brett Mundell

Managing Director

Brett has more than 20 years of business software sales and company management experience. Brett has been involved in more than 300 ERP projects. His passion is customer satisfaction, making sure every client is more than just satisfied. Brett wants our customers to be driven to refer their friends and peers because we offer the best services and technology available and because we exceeded their expectations.

7 Things You Should Be Looking For In A Modern ERP Solution

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Disruptive technologies that were once seen as “ideas” are today a reality for many businesses.

Given the advancement of these new technologies over the last few years, if we look at how Enterprise Resource Planning has evolved, one thing is clear – the ERP world has changed!

Cloud, Mobility, Artificial Intelligence (AI) and the Internet of Things (IoT) to name a few. What impact is this having on ERP and how do you make sure that you take advantage of these technology shifts when the time comes to implement or choose an ERP software for your business?

Here is a short video on what to look for in modern ERP software.

Riding the wave of innovation in ERP

Firstly, a technology that doesn’t translate into meaningful change and associated advantages for your business is absolutely pointless!

You need to make sure that Cloud, Mobility and AI have a positive impact on your ERP solution by providing real business benefits.

Assuming we are in agreement that these technical changes will lead to business benefits and should be taken into account when choosing an ERP, let’s focus our attention on what we should be looking for in a modern ERP software.

Fit for purpose. Let’s start by making sure that we choose an ERP solution that is a good fit for the business. This requires an analysis of multiple components:

Budget – can you afford the solution?
Does the solution that you are planning to implement offer the required functionality to help run your business better?
Make sure you cover all functional requirements (financial, operational, manufacturing, CRM) during a scoping exercise.

Internal muscle. Do you have the internal muscle to implement ERP? If you want to learn more about why you need “internal muscle” to implement and maintain an ERP solution, check this blog post.
Web-based technology. Sounds obvious and it is! Your Cloud-Based ERP solution should have web client technology to allow access from anywhere, anytime via any device.
Mobility. Apps and web client access are critical to give the user a consistent user experience across any device. You should be able to log in via mobility apps or the web from your phone, tablet or pc.
Support. It goes without saying that you will require an ERP partner that offers great support. Without a strong support partner, you might encounter challenges for your day-to-day ERP users and long-term ERP optimisation strategy.
Upgrades. Upgrades should be included as part of your cloud solution. If you are not going with a cloud solution, then find out more about future upgrades. Things like frequency, costs and potential disruption to your day-to-day operations should be taken into account. Technology is moving at a more rapid pace than ever before so make sure that your ERP provider can offer technology enhancements to give your business the competitive edge that you are seeking.
Cloud. The team at Leverage Technologies has written several blogs on the subject of Cloud ERP vs On-Premise ERP. There is no right or wrong answer except to say that more and more companies are moving their ERP solutions to the cloud for all the reasons we know about – lower costs, scalability and access to computing power to provide a more agile environment. Ultimately leading to an easier deployment and maintenance of your ERP system.

Conclusion

New technology shifts are making it easier to do business and are providing a competitive edge for organisations that embrace change.

Current technology trends that will provide a competitive advantage include Mobility, Cloud, Artificial Intelligence, IoT and Big Data analytics.

Make sure you are positioned to take advantage of these technologies by having a modern, technology-ready, ERP platform.

Modern ERP solutions can help you run a better business. Invest in the right ERP solution and take advantage of a world of new technology that will provide your business with real day-to-day benefits and strategic, long-term opportunities.

For more information or to learn how modern Cloud ERP can help your business grow, call 1300 045 046 or email [email protected].

Cloud Computing And The New Era Of ERP Software Functionality

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Enterprise Resource Planning (ERP) has moved away from core functionality and to a new era of technical, integrated solutions.

The advent of Cloud-Based ERP solutions has provided smaller companies with access to computing power that was previously only available to large organisations.

What does this mean to your business and how can you use this to your advantage?

In this article, we are going to review some of the main changes that the Cloud has brought to the ERP market and how businesses like yours can benefit from such innovations.

Leverage the Cloud to make ERP the centre of your universe

Why would you want to move your ERP software solution to the Cloud?

First of all, with the advent of Cloud-enabled applications, you can get more computing power than you have ever dreamed of and you can rent it monthly.

Secondly, it opens up your business to a universe of new functionalities that can be integrated more easily and cost-effectively into your core ERP software.

As always, I am a huge believer in business benefits. There is no point moving your ERP solution to the Cloud unless there are real, everyday benefits. Some of these may include:

Improved cash flow;
Quicker quote to cash times;
Improved customer satisfaction;
Better information for decision making.

One integrated system to manage every aspect of your business

There is a move away from ERP being a non-technical, functional solution and towards total integration across multiple platforms, technologies and function set.

Cloud computing has opened up a new world for developers. As an example, if you want to develop an app for sales or a solution for expense management, you can rent infrastructure in the Cloud and can start to develop your apps, quickly and cost-effectively.

This is opening up a whole new world where the customer can choose to integrate multiple different apps and solutions for a fraction of the price that would have been paid several years ago.

Think about the following point solutions that can be added to your core ERP solution:

AP automation
Expense management
Timesheet billing
Job Costing
Service management
Mobility based Sales order taking
E-commerce
BI

Ten years ago, when selecting an ERP solution, you looked to have all of these requirements inside a single system. This is because back then, integration was time-consuming and expensive.

Today, in a Cloud-connected world, your ERP application is fast becoming the centre of this connected universe with options to easily integrate point solutions as and when required.

This breaks down the barriers to ERP adoption for small and medium businesses. Instead of embarking on a single, huge, ERP project across the entire enterprise, a modern ERP application for SME businesses allows the organization to add best of breed winning solutions to the core ERP application as and when required.

What are the transformations in the ERP industry that are facilitating the new era of Cloud-enabled ERP software functionality?

Better web integration technology;
Easier Cloud-Based development platforms for small development companies;
A change to a more connected world and an expectation of quick time to value.

Conclusion

The new age in Cloud-enabled software is great news for small to medium-sized businesses wanting to implement an ERP software solution.

Now more than ever customers can choose the applications they want, when they want it and easily integrate it into their ERP systems to extend their capabilities.

If you are evaluating possible Cloud ERP options for your business, call 1300 045 046 or email [email protected] to speak to one of our consultants.

Brett Mundell

Managing Director

Cloud ERP or On-Premise ERP? Answering The Million Dollar Question

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We have written multiple articles looking at the pros and cons of Cloud ERP vs on-premise ERP.

I am often asked by existing and prospective customers “should my ERP solution be on-premise or Cloud-based?”.

My answer is “you, the customer should decide”.

The team at Leverage Technologies will provide you with all of the relevant information to make an informed decision but at the end of the day, the decision is yours – the customer.

There are no right or wrong answers when it comes to Cloud ERP. What works for one company might not work for another.

First of all, let me start by saying that I am a huge fan of Cloud-based ERP! Want to know why? Here are some numbers and statistics from our experience implementing ERP in the last year.

In 2017, roughly 60% of all our new ERP customers were Cloud-based. Last quarter, the adoption rate of new customers choosing the Cloud was 100% across our SAP, Sage and MYOB Advanced business units.

These numbers indicate what most ERP providers already know. There is a growing shift towards taking ERP into the cloud.

Why move to a Cloud-Based ERP system?

Many business applications (in fact almost all of them) can be moved to the Cloud. These include your e-mail, documents and other systems like Customer Relationship Management, Enterprise Resource Planning and more. The benefits of moving to a Cloud ERP system include:

No need for onsite, expensive IT infrastructure;
Pay as you use, just like a utility;
Use Operational expenditure (Opex) rather than Capital expenditure (Capex);
No large upfront software costs;
Make use of cloud infrastructure for better security and scalability;
Gain access to software, hardware and infrastructure “power” previously not available to SMEs.

Given the many advantages of Cloud-based ERP software, what prevents all companies from moving their ERP to the Cloud?

Here is our view on why some companies may prefer an on-premise ERP setup.

Why implement an on-premise ERP system?

Internet infrastructure. Slow Internet is the number one reason why businesses might decide to implement ERP on-premise. This is because slow or unreliable internet infrastructure just won’t work for Cloud ERP deployments.

On-going costs. A number of businesses tell us that they believe that cloud will be more expensive over five years. But let’s be careful with this assessment! When comparing the cost of on-premise vs Cloud over a particular time period make sure you consider all relevant on-premise costs including infrastructure, back-up, IT management etc.

Security. Some SMEs still consider Cloud-Based ERP to be a “security” risk. Usually, this is a false economy. A global ERP provider of cloud ERP Solutions usually provides more security than an SME running their own infrastructure and security. If anything, your Cloud ERP solution is likely to be more secure than an on-premise solution.

What happens to my data if I stop paying my Cloud fees? The feedback on this particular topic will no doubt differ from one ERP provider to another.

The fear that some businesses have is that if they stop paying the monthly or annual Cloud fees the Cloud provider will cut off access and hold the data to ransom. I would suggest that this is an unlikely scenario if you are working with a global, well-established, provider of Cloud-based ERP solutions!

Looking beyond the 5-year ROI

The main reasons to move your ERP to the Cloud are often overlooked.

SMEs often spend time comparing the cost of Cloud vs on-premise over five years or talking about security and other structural elements. This ignores one of the major reasons for moving your ERP to the Cloud – endless possibilities!

We live in a world where Cloud has given us access to unlimited computing for a relatively low monthly fee. In today’s world, even small businesses can access enterprise-grade computing resources at a small business cost.

The world of ERP is changing too. Customers want a single, integrated platform for all aspects of their business – ERP, E-commerce, CRM, Expense Management, Accounts Payable (AP) Automation, Human Capital Management (HCM), Payroll, Business Intelligence (BI) and more. Previously, these functionalities were exclusive to large enterprises but today any business can use such applications, all possible through the Cloud.

Let’s consider two examples, BI and AP Automation.

Ten years ago, under a traditional on-premise ERP model, BI and AP Automation software was only available to mid-market and enterprise customers. The computing power and internal IT infrastructure required for BI and AP Automation tools were beyond the budget and expertise of most SMEs.

In a Cloud-based, connected world. BI and AP Automation software is hosted in the cloud and available to be switched on at short notice.

Suddenly, you can access BI tools for $10 per user per month with pre-written integration to multiple databases and platforms. Time to value is quick.

The same is true of AP automation. A few years ago, AP Automation projects were beyond the budget of most SMEs. With the advent of Cloud-based AP Automation solutions, SMEs can now “rent” an AP Automation solution for a relatively low monthly fee.

Conclusion

When it comes to choosing between a Cloud-based or On-premise ERP software solution, there is no right or wrong answer.

From our experience, Cloud Computing is rapidly shifting the way ERP is adopted and consumed. This is because of the many advantages that a Cloud-based ERP system provides, even beyond the 5-year ROI.

On the other hand, some businesses still prefer an On-premise setup due to considerations involving mainly security and cost.

Our advice when considering the two options, is ultimately to factor in all costs associated and look beyond the 5-year ROI to truly understand the possibilities that one system will give your business over the other.

The truth is, Cloud-based ERP might not be for everyone. The good news is that the choice is yours and as a customer you can assess the pros and cons to make an informed decision.

Are you evaluating possible ERP options for your business? Call 1300 045 046 or email [email protected] to speak to one of our consultants.

Brett Mundell

Managing Director