As a disclaimer, we are a NetSuite Partner, so clearly, we are going to sing the praises of cloud based ERP systems.
However this doesn’t take anything away from the fact in 2014 there will be some strong drivers and very good reasons for wholesalers / distributors to move their ERP systems into the cloud.
My top 5 reasons are:
On premise ERP systems are traditionally associated with large implementation costs. Installations require the purchase and installation of hardware in addition to the purchase and configuration of the software. However what’s less commonly commented on but perhaps more important than the up-front cost is the cost of maintaining these systems. However, in my experience these costs also tend to be higher with on premise software.
Maintenance of the software system and any bespoke code within the system can be expense.
Accessibility – any device, anywhere, anytime
We live in a world where employees are beginning to expect to be able to access their business data from anywhere and any device. This is a change being driven by users who are keen to use their preferred device at home and on the way to and from work.
Anyone who has been on a train in the past year will have noticed the lack of newspapers and books. Everyone is now seems to be attached to an IPad, IPhone, Smartphone or Tablet. The same is true at home. Organisations which have embraced this change will already be reaping the benefits of this allowing their employees to keep working whilst on the move and while they are at home.
If you are running an on premise ERP you can pretty much forget about benefiting from this extra available employee resource. Even if the software included functionality compatible with these mobile devices unreliable internet connections / low upstream bandwidth in most commercial premises would at best give workers attempting to work on the move from on premise ERP systems a very poor and frustrating experience.
Historically security has been sighted as a reason not to move to the cloud or something which features as a concern in customer’s minds.
I believe that this is something which will change drastically over the next few years with businesses starting to aim to move all sensitive data into the cloud to improve secutiry of data.
Over the years working with a great many organisations from small businesses to PLC’s with on premise software I found that in practice security is much more of a concern for those with on premise software. All too often in house IT teams miss configure a firewall or do not understand the vulnerabilities of on premise systems.
As adoption of cloud based systems increases I believe people will begin to have confidence in the larger cloud based ERP providers in terms of the security they offer. This confidence will in my opinion be well placed as these systems will in the fullness of time prove to be more secure than the older on premise systems.
Multi-subsidiary companies – reporting across subsidiaries
Holding all data in the cloud means that data from different subsiduraries and in different geographical locations can be held in a centralised location in a single software system. This makes rolling up reporting across subsidiaries without exporting data from each system and centralising it possible.
Integration with other systems
I’ve been involved in countless projects integrating with Microsoft CRM, Mocrosoft Dynamics Nav, TAS accounts, Sage 50, Sage 200 and also Netsuite (to name a few). Having worked on the initial integration projects I’ve also had the pleasure of managing a development team supporting these integrations.
One theme is consistent in all of the integrations I have been involved with….. Integrations with on-premise ERP systems require more support….. A lot more support……
Why? The main reasons are stem from problems businesses have with internal IT networks, firewalls and connections to the physical building where the on-premise system is housed. Connecting to a cloud system with high availability housed in a high quality data centre with redundant internet providers and power supplies makes these types of issue much less likely.
But don’t just take my work for it. This article from NetSuite gives a good overview of some of the considerations when looking to move your ERP to the cloud and also some strong arguments in favour of it….. The IT Buyer’s Guide to Cloud ERP