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Should You Transition to a Cloud-Hosted ERP?
If you are a business leader, your IT department has likely attempted to convince you that a move to the cloud is, hands down, the right way to go. Everyone seems to be jumping on the cloud-based bandwagon, but is it truly the right path to take for your ERP system? 

Organizational Trends and Database Solutions 

Numerous companies around the globe are considering transitioning to cloud-based enterprise resource planning systems. IT savvy leaders realize that internally housing the servers and data required for ERP systems poses numerous drawbacks.

The largest providers for ERP systems, SAP and Oracle, are now requiring extensive hardware upgrades to maintain their software. This trend has put many companies in incredibly tricky positions. Organizations need to either purchase extensive upgrades for on-site infrastructure or switch to a cloud-based system.

Since on-site solutions take extensive time and resources to maintain, switching to a cloud system can positively impact a business's long-run bottom line. Most cloud systems operate on a monthly fee, and their setup is instantaneous.

This monthly management provided by servicers such as AWS includes maintenance, upgrades and minimal downtime. If on-site servers go down, then it can negatively affect the business in a variety of ways, and the resources and human capital that it takes to get a local ERP system back up and running can be substantial. 

One of the other major draws for switching to cloud-based ERP systems is the ability to access the servers from anywhere in the world remotely. This is one of the main features which convinces many CEOs and other executives to switch when considering a move to the cloud.

If an ERP system is hosted on-site, then users must either be at the company to access the system or use a VPN (a virtual private network). Setting up a VPN can be time-consuming and it's not always a secure connection.

On the other hand, cloud-based ERPs can be accessed via the internet from any device around the globe, which is an important feature to have in today's globalized world. Employees do not have to worry while traveling or working from home. Remote teams also can access all of the company's ERP resources.

Small Businesses and Nonprofit Organizations

If cloud-based ERPs are great for large businesses with remote teams and large IT departments, you may be wondering about small businesses or non-profits.

Massive enterprises were the first adopters of cloud-based data storage and remotely hosted systems such as ERPs. Smaller companies have lacked the resources capable of storing the on-site infrastructure required for an ERP system. Cloud software allows smaller businesses and non-profits to reap the same benefits from ERPs that larger organizations have always been able to profit from without having to invest a significant amount of money towards IT efforts.

The move for small businesses and non-profits utilizing this technology is slow, but it is beginning to catch on as a major trend. Organizations are not concerned about turning profits, but they hyper-aware and focused on where their money and resources are going. ERP systems provide the data tracking and organization needed for smaller businesses and nonprofit orgs to thrive and focus on the mission or strategic aim of their work.

Why Is There Still Widespread Hesitation and Skepticism? 

The major reason why many C-Suite executives are hesitant to move their ERP to a cloud-based system is the same reason why anyone is afraid of a major change - it brings about uncertainty and worry. Moving all of your organization's most valuable data to the cloud means a physical removal of something a company is used to taking care of internally. This leads to the thinking that data is not secure on the cloud and that the company storing the data is not to be trusted.

Cloud systems do indeed have drawbacks. If a cloud-based system is hacked, then all the information on that cloud is then breached. Although on-site solutions are also unsecure, it can be much easier to gain physical access to a company than a server farm and trying to remote access into a local server structure can leave it vulnerable to hacking threats.

Strong evidence suggests the upsides to cloud-based ERPs outweigh the downsides. Still, the technology and adoption must become more widespread before C-Suite executives begin to acknowledge that this one change is genuinely for the better.


About the Author

Kayla Matthews is a tech-loving blogger who writes and edits Follow her on Twitter @productibytes to read all of her latest posts!
Published Friday, December 27, 2019 7:32 AM by David Marshall
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