Companies that migrate to a cloud enterprise resource planning (ERP) solution quickly experience the benefits of scalability and cost-efficiency that were previously only possible through expensive on-premise solutions. So it’s no surprise a recent report from IDC predicts that by 2021, worldwide spending on cloud services will reach $266 billion, indicating 21 percent growth over the next five years.
Even with more and more research discussing the benefits of cloud ERP, many manufacturing companies are still hesitant to make the move because of three common misconceptions.
Myth 1: Moving to cloud ERP requires rewriting and redesigning all custom coded applications
One of the most common misconceptions about moving to cloud ERP is that the move requires companies to rewrite all custom coded applications. Companies often believe the migration will tax the company’s developer resources. However, with most cloud deployments, no rewriting of code is required. Most applications can simply be re-hosted on cloud platforms with minimal configurations and alterations in system architecture. Re-hosting prevents investing in more hardware that will be left unused at the end of the migration.
Myth 2: All applications must be moved to the cloud immediately upon purchase
Businesses may feel pressure to move all applications to the cloud immediately upon signing the contract. But, unless your previous ERP license is expiring, this may not be required. In fact, keeping your sensitive business data on private cloud or internal servers may help ensure the stability of the business during the migration. Adopting a hybrid cloud model is key to overcoming the challenge of deciding what to keep and what to change during the migration. A conscious effort should be made by your company to understand whether upgrading or replacing all of your legacy systems, functionalities, and customizations make sense.
Myth 3: Data isn’t safe on the cloud
Many still believe that data on the cloud is not as safe as information stored in an on-premise software system. The truth, however, is that data protected by industry-standard SSL encryption is equally as secure as most on-premise ERP solutions. Leading providers of ERP cloud solutions follow highest industry standards of security. When evaluating vendors, organizations should ask about robust and well-configured load balancers, secure firewalls and automatic patch management features for maximum security.
Additionally, regional governments impose stringent data protection requirements for ERP vendors. In addition, standard audit schemes such as ISO-9001 place additional regulations on firms. In some regions, business data cannot be transferred outside a particular region or country without keeping necessary safeguards in place—giving your information an extra layer of security.
When planning for migration to a new software, consider the preferred hosting model—true cloud, or hybrid—and the physical location where the data will be housed. When it comes to timing, businesses must keep in mind that outside of internal processes, different vendors quote drastically different timelines for implementation, software customization and data migration. Companies must make sure to consider pre-purchase and post-purchase timelines when mapping out the migration strategy to ensure a seamless transition.
By Cameron Ackbury, President of US Operations, Deskera