When it comes time to upgrade your ERP you will be faced with a choice, should your next ERP be a cloud-based system? This can be a difficult choice for a business and what is right for one company may not be right for yours.
For the majority of companies, the answer to should your next ERP be a cloud-based system is a resounding yes. The possibility of cost savings and the scalability of cloud-based solutions provide real benefits over traditional on-premises solutions.
With better internet access and the popularity of the software as a service (SAAS) market, ERP vendors saw a real opportunity to lower the costs of solutions. By offering a solution that was hosted on their servers, companies would have to spend less on installing, cooling, and managing a server room on-premise.
Today, these cost benefits do still exist, although much smaller than in previous years. However, the cost of deploying a cloud solution remains significantly lower than an on-premise ERP. And this is where many companies stand to make the most savings. Having a cloud solution means you need a smaller IT team, do not have to worry about cooling and maintenance, and can free up space where a server room would have previously been.
Another thing to consider is the upfront cost of staying with an on-premise solution. License fees are often based on the size of the business or number of users which results in a large investment up-front. You also must consider the annual maintenance and upgrade costs that you cannot avoid if you want a functioning solution. A cloud-based ERP will likely have a monthly or annual subscription that includes system upgrades and enhancements as an on-going basis, saving you time and money.
One area of concern when cloud-based systems were emerging was on the security of data. Rather than individual companies holding their own data, the servers of vendors hold information for a lot of companies. The fear was this could make them attractive to hackers due to the potential reward if they broke through. So, is it wise to trust another company with all your data?
Thankfully, these fears have largely not come to fruition. Vendors of cloud-based software take security seriously and many of the large companies like Microsoft and Amazon have the resources to combat threats.
You also have to consider that most security breaches happen as a result of employees. The internet of things significantly contributes to this increased vulnerability. Mobile phones, tablets, laptops and even watches are constantly being taken from insecure home or public internet connections into a ‘secure’ workplace network. This results in the security of a workplace network being dependant on an employee’s diligence and technical know-how to ensure their devices do not expose an internal threat.
When deciding should your next ERP system be a cloud-based system it is worth considering the security risks of having your data held by another company, but remember the risks that exist for on-premise options too.
Support for Remote
While support for more flexible and remote working has been slowly rising, the Covid-19 pandemic accelerated change by years. A cloud-based solution allows you to support people working from a variety of locations and devices with ease. An online portal system can allow employees to access what they need and security concerns can be addressed by only allowing connections through virtual private networks (VPNs).
Even after countries have recovered from Covid-19 there is likely to be strong demand for continuing the increased flexibility that has become the norm. A cloud-based ERP will be important in helping to facilitate this flexibility in the easiest way possible.
In summary, the answer to should your next ERP be a cloud-based system is yes for most companies. This approach will be key for supporting more remote working over the coming years and the ability to save across the lifetime of ownership is very attractive. Even the common security concerns of another company holding your data are largely not an issue due to the incredible effort large companies put into protecting your data.
If you would like support in deciding if cloud-based ERP is the right move for your company, be sure to contact our team of ERP experts today.