Five points to consider when moving to cloud ERP

Published on the 28/02/2018 | Written by Jeff Arnold

Cloud ERP has multiple attractive propositions – but is it right for your organisation, ponders Unit4’s Jeff Arnold…

There seems to be little doubt that the cloud will be the future deployment method of choice for enterprise applications for many organisations. The reduced complexity, lower internal IT support costs and unlimited scalability to capacity on demand promises a great deal. However, not every organisation has figured out the best fit when it comes to cloud computing, particularly in regards to enterprise applications.

The majority of big businesses are at least weighing their options, if for no other reason than that they want to maintain a technological edge. For any company moving its ERP to a cloud deployment model, a good project plan and testing methodology is necessary to ensure the project can manage the business change. This can help overcome any problems with data migration and organisational workflow once a successful business case has been made.

Established businesses looking to move their ERP to the cloud should consider the five points below in detail.

  1. How big, how small?

As a crucial first step, you need to assess if you’re willing to move all systems in one go or start with the non-core business components before migrating their ERP. For those using highly configurable systems designed to specific requirements, a hybrid approach to cloud is often the ideal path.

The fact is there are many options available; however, you should consider the option that delivers the benefit of scalability and ultimately doesn’t impact competitiveness. A ‘fit for all’ doesn’t exist, so it’s vital to have a full picture of the your IT applications to understand which business processes will be automated, how each process may change and what business benefits are required from the move. Considering the long-term impact on the enterprise is mandatory.

  1. The need for independence

Two key factors need to be on top of any technology decision agenda: cost control and the ability to satisfy the requirements associated with business change. Traditional on-premises ERP systems are not always the most suitable to move to a cloud deployment model, as the architecture may be prohibitive no matter how it is deployed. Above all, it’s important to ensure the system is flexible enough to respond to restructures within the business.

Cloud offerings that provide the means to easily re-deploy back to private cloud or on-premises should it be required in the future are few and far between, but it’s an important consideration. Your organisation may face a change of IT policy or a significant reshuffle or change in business requirements that would request at least a partial move back to on premises. Residency in the cloud doesn’t have to be permanent.

  1. Data prioritisation

It is recognised that on average only 10 percent of an organisation’s data is deemed critical (where a file is accessed or changed frequently). This can be classed as data critical to continued operations if faced with a disaster scenario. It’s important to protect the remaining 90 percent but this can be a sound approach to data prioritisation. This way, you can decide how many weeks/months of data is required from each critical business system to get your business back up and running.

So the question is: do you need to move all historical data or can you pare it down to the data that’s vital for running the organisation today? Many assume they should retain mission critical data in their own on-premises data centre, thinking it will be safer there.

This is often a mistake. Serviced cloud data centres are highly secure with all the state-of-the-art systems and controls required for them to be competitive and they compete on reliability, security and performance. Cloud providers will devote more time, resources, and dedicated expertise to maintaining the integrity of their data center than most organisations can to their own IT environment.

  1. Pondering service and security

Regardless of the promises of cloud computing, you should be aware of what’s happening in the cloud, how applications are being delivered, and how traffic is being controlled and directed. This includes considering the merits of internal IT operations and procedures and its ability to secure mission critical data. With full visibility into these details, you can decide how and when to move to the cloud.

When it comes to security, a comparison between providers can be quickly done if you evaluate the cloud provider’s security capabilities, reliability history and privacy clauses including their back-up and recovery programs and service level agreements.

You should also ensure the proposed cloud or hosting provider is certified. ISO27001 is recognised as the certification providers should have, but it is important to ensure the provider has this certification for the establishment, operation and maintenance of an information security management system. It should cover equipment and processes in the data centre and management team processes. SSAE16 type II compliance is also important.

  1. Have a Disaster Recovery (DR) plan

There is a myriad of incidents that can happen and impact cloud providers. The likes of floods, hurricanes, tornadoes, earthquake or terrorism should be a major consideration, meaning the provider needs to be armed with a disaster recovery plan in order to deliver continuous availability, ensure business continuity and insure against the loss of critical ERP related IT infrastructure and data.

Service level agreements describing guarantees and warranties for uptime and security (including response plan for security issues and the way they are handled) should be offered by all service providers. Procedures and documentation to protect intellectual property are also vital.

It goes without saying cloud has a number of benefits, however, some important considerations are required before a decision is made.

Most enterprises have already started weighing up the pros and cons. ERP is a complex system often consisting of hundreds of thousands of interdependent database tables, with millions of lines of code. Replicating business change in these systems is generally a complex process, and can be time consuming and costly with some of the traditional ‘big’ ERP packages because code-level changes are required.

Before moving these systems to the cloud effectively, evaluate the change pressures and the way the provider can manage that. The architectural structure of an ERP system is the important factor in relation to dealing with business change, whether cloud based or on-premises. If the system cannot be adapted to meet change requirements, your organisation is putting itself at risk. After all, no one wants to end up with multi-million- dollar costs related to business disruption and the cost of change over time.


Jeff Arnold is Sales Director for Unit4 in A/NZ.

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