DeutschlandÖsterreichSchweizExpert Information - 21.01.20

ERP Selection: Cloud Myths Put to the Test

Seven Central Aspects of the Cloud and their Importance

Nowadays, ERP is not simply used as on-premises software anymore. Cloud offers are gaining ground. Let's take a closer look at this. In this article, ERP provider proALPHA looks into seven of the most frequent stereotypes and myths surrounding the cloud.

There are many ways to operate an ERP system outside a company's own data center. Some companies are tempted by Software as a Service (SaaS). Others think about having their ERP software hosted by service providers. However, you need to consider some aspects before making a decision. Not everything published about cloud solutions in the last years can stand its ground against a critical examination. The following seven criteria require a closer look:

  1. Customizing Options
    Cloud solutions cannot be customized: This is only partly true. Many public cloud offers that run in a multi-company environment are not as flexible as a "personal" software. There are some offers that can be adjusted significantly, though, similar to an on-premises software. To prevent the costs for customizing from getting out of hand, companies should make sure that they are able to configure the desired customizations themselves – without the need for an internal or external developer.
  2. Less Effort in the Roll-Out
    Speaking of effort: The biggest parts of an ERP project are the analysis of the requirements, the revision of existing processes and their mapping in the ERP system. The physical location of the software hardly matters. In this context, a cloud application does not offer any decisive advantages over on-premises solutions.
  3. Less Work and Control
    During operation, however, an ERP from the cloud saves the IT department a lot of work. This cannot be denied. The valuable internal resources don't have to take care of the servers, memories and backups. Entrusting the operation of your ERP system to a third party also means relinquishing control to some extent, e.g. control over the time at which updates are installed. This can be solved with individual service and maintenance agreements, though.
  4. Operating Costs
    A classic cloud solution does not require high investments in licenses and hardware. This is why a lot of people consider the cloud to be less expensive. In reality, the operating costs are equally distributed over the period of use. This has positive effects on liquidity. Whether the total cost of ownership can actually be reduced with a cloud solution is determined by many other company-specific factors.
  5. Security
    Cloud solutions were more likely to be attacked than corporate IT. This is not the case anymore. There is an overall increase in attacks now. Since there is no such thing as absolute security, a company must protect itself the best way possible and prepare for the worst case with corresponding reaction plans. This is a strong point for the cloud: If the company does not employ a proven security specialist, software hosted by a reliable service provider is oftentimes even better protected than in the in-house data center.
  6. Mobility from the Cloud
    The topics of cloud and mobility are often mixed up. According to popular opinion, a web-based application is inherently ready for used on mobile devices. However, user interfaces displaying a lot of functions on the smallest screens do not automatically enhance productivity. Companies whose greatest weakness lies in the area of mobile working should rather consider introducing special mobile solutions tailored to their processes, including, of course, the direct communication with the ERP system.
  7. Choice Between Cloud and On-Premises
    Many ERP solutions require a company to decide early on which way to go. Even providers offering both solutions often consider them as "separate worlds". This is were you need to take a close look. Only few offer the possibility of mixed operation. In some cases, however, this is very useful, for example when you open a new office abroad.

Against this background, two beneficial application scenarios for an ERP from the cloud stand out. On the one hand, there are companies who want to connect their subsidiaries to their ERP system as soon as possible. On the other hand, fast growing mid-sized enterprises and startups with limited IT resources benefit from the cloud. There is no 'one size fits all' solution for the decision for or against the cloud, though. Every company must weight the pros and cons by itself, regardless of handed-down myths and legends.

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Susanne Koerber-Wilhelm will be happy to answer your questions and provide you with further information about proALPHA.

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