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Is a Cloud based ERP Deployment right for you?

Is a Cloud based ERP Deployment right for you?

According to the recent Gartner Report, Adoption of Cloud ERP, 2013 Through 2023 47% of organizations surveyed plan to move their core ERP systems to the cloud within five years.

While there are clear cost benefits to moving your ERP to the cloud, the decision to move to the cloud is often not an easy one to make.

In this blog post we will outline some of the key benefits of the SaaS model for ERP while acknowledging that, for the moment at least, ERP Cloud may not be the right choice for everyone.

The benefits of Cloud Based ERP:

  •  Cost: Cloud based ERP is typically paid for through a monthly subscription which includes software, hosting and support costs. Capital expenditure needed for implementation is therefore significantly lower than for a “traditional” on premise deployment. Support and operating costs can be lower as well.

  • Flexibility: A cloud based ERP offering can quickly be scaled up as your organization grows.

  • Simplicity: ERP Cloud solution providers are responsible for maintaining the software and the hardware which means you don’t have to worry about patches, upgrades, refreshes and backups. This should free up IT resources and should also lead to cost savings.

  • Rapid Deployment: A cloud based ERP deployment is faster than a “traditional” ERP deployment. 

How to Decide if ERP SaaS is the Right Fit?

When deciding whether to move your ERP to the cloud you’ll have to take into account a wide number of factors including your industry, company size, solution complexity, security needs, and the culture of the organization.

The size of the IT footprint and the level of complexity of the ERP system are two factors which are particularly important:

  • Size: Currently, SMBs are likely to reap the greatest benefits from Cloud ERP. Many larger companies who have already made a significant investment in IT infrastructure may find the benefits of in-house ownership greater than the cost-savings offered by an ERP Cloud solution.

  • Complexity: Companies who have a large amount of customizations and numerous integrations are less likely to move to the cloud for the moment.

Even if you decide that cloud based ERP is not right for your organization today, it is important to revisit this decision regularly. It might not be the right fit now, but in two years the situation may have changed.

Similarly, while you may not be comfortable moving your ERP completely to the cloud, under certain circumstances an ERP cloud solution might be appropriate, for example, in an overseas subsidiary or a particular business unit.

Tags: ERP, Cloud, SMB

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About the author

Christian Fronteras

Christian Fronteras has over twenty years’ experience working on Oracle JD Edwards, including ten years as a senior manager at JD Edwards. CEO of Redfaire UK Ltd, Christian has extensive experience of enabling clients to optimize their investment in Oracle JD Edwards. With a strong technical background, Christian also has extensive international management experience.

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