Do you work with an organization that currently has an on-premise ERP and is considering a move to a cloud-based solution? Or perhaps you work with a company that does not have an ERP system and you’re trying to decide whether cloud or on-premise is the way to go? The truth is, choosing the best ERP solution for your company is an exciting but potentially daunting challenge, as there is no easy “one size fits all” answer.

As you go through the decision process, account for the particularities of your company, with its culture, its legacy systems, the skills of the IT team and the budget available, and then cross-reference that with what is happening in your industry.

Speaking with our customers, some of whom opt for on-premise and some who decide to go with an ERP Cloud Solution, one theme that emerges is that making like-for-like comparisons between on-premise and Cloud ERP functionality and only relying on traditional metrics such as Total Cost of Ownership (TCO) is a mistake.

Don’t Settle for Similar Outcomes

We all know the cost saving delivered by Cloud ERP; no hardware, no upgrade costs, faster deployments, etc. However, a decision to move to the Cloud should not just be based on cost-savings alone.

Choosing a Cloud-based ERP is not about doing the same things you do with your current ERP, but doing it in the Cloud. It is an opportunity to transform and optimize.  If you only use traditional tools like TCO to measure the success of the project and don’t also consider opportunity cost, you risk underestimating the immense business value that can be delivered by moving to the Cloud.

That is not to say that you should necessarily abandon your on-premise ERP completely. Maybe the best strategy for you and your company is to take it step-by-step. The decision is a complex one and should not be based on cost alone.

Rod Johnson, GVP - ERP & SCM Cloud GTM, Oracle in this short but insightful blog on ERP Cloud Adoption provides a good point to kick-start your reflection:

Do we stay the course and look for incremental innovation through best-in-class extensions? Or do we start to re-architect our core operations for the digital world? These non-trivial choices will have massive economic and competitive implications for every company.

The Real Estate Analogy

• Stay in the same house but add an extension (hybrid Cloud model)
• Move to a bigger house with a more modern layout in a different neighborhood (Upgrade & Extend your current ERP with various Cloud functionalities)
• Decide to leave the city and move far away to a house in the countryside (Upgrade your current ERP and move to a fully Cloud ERP model)

Oracle’s ERP Cloud