Biswas Nair, Managing Director, Aashna Cloudtech
Enterprises are shifting gears to new business models. Heavy pressure from the economy, as well as changes in customer, employee, and partner expectations have compelled enterprises to respond innovatively.
Cloud is becoming a critical part of the business strategy as it supports other key technologies like mobility, decision support systems, and collaboration/social systems. IT managers and CIOs are now confident about cloud—they manage their entire organization over it.
Meanwhile, the attitude towards ERP and cloud computing has also witnessed a gradual shift. Traditionally, legacy ERP solutions were regarded as ‘software crown jewels’. Though they were expensive, bulky, and large, they stood at the epicenter of a company’s core business. The speed at which IT guys have accepted ERP on cloud to ensure smooth running of the business, shouldn’t come as a surprise. Organizations are increasingly considering whether they should replace their maturing ERP system with cloud-based ERP. CIOs and CTOs who have a strategic approach to business regard this question as utmost important.
THE MODERN ENTERPRISE IT ARCHITECTURE
All businesses—large and small—go through cycles of change and growth, associated with the organization, technology, and the overall economy. Its processes and systems are also required to be upgraded from time to time to keep pace with the change. Currently, we are witnessing a continuous transformation in IT that changes the way cloud is used by enterprises. Modern enterprises are using technology as a lever for new and innovative approaches to business. To meet new challenges, the modern enterprise is getting agile, data-driven, responsive, and highly innovative. The way they evolve with industry changes is what sets modern enterprises apart from the rest.
Unlike earlier, the ‘one size fits all’ approach is no longer an option to address IT architecture in the modern enterprises. CIOs today have a clear view of their business requirements and they realize the importance of addressing legacy complexities and inflexibility. The way they address IT requirements has brought in a new dimension of possibilities for the CIOs and CFOs to increase agility to support the modern businesses. Here are some factors that modern enterprises consider while taking IT decisions:
1. One of the major changes in the modern CIO’s approach to IT is to not start with solving IT complexities at the beginning, but to first identify business needs and understand how IT can solve these issues.
2. Besides, the IT decisions that shape an enterprise’s architecture are taken on a 6-12 months period, rather than the earlier practice of updating it every 5-10 years.
3. Any new program that affects the IT environment must take into account the evolving strategies of business. The modern enterprise can make itself future-ready by creating systems to support the growth if this aspect is looked into.
MOVING ERP TO THE CLOUD
Lately, the focus has shifted towards cloud-based ERP solutions, given their holistic approach that takes into account almost everything a business requires. With a cloud-based ERP, it is easy for enterprises to keep pace with the ever changing needs of customers, which makes it a better alternative to legacy systems.
The transition from host-based to client-server technology was one of the most significant steps taken in ERP solutions. Legacy ERP solutions are not only expensive, but also time-consuming and cumbersome to maintain and modify. While some vendors have made it less costly to configure in recent times, legacy ERP systems lack attention to detail which tends to turn into a pain in the neck after a short period of time. The answer to this solution floats in the cloud.
OPPORTUNITIES ON CLOUD
The business benefits of moving your ERP to cloud are plenty. Many trusted enterprise software vendors have introduced cloud applications that are robust, rich in features, and easy to deploy. ERP on cloud is much more flexible and scalable than its ancestors. In many use cases, it has also been known to eliminate silos and simplify integration of various business activities.
Moreover, a cloud-based ERP solution helps people to collaborate simultaneously on an issue in real time. Anything from an inventory problem to a supplier issue can now be solved with just a few clicks. Additionally, role-based dashboards can also be created according to the user requirement. It also makes remote access to information available on cloud-based ERP solutions— an option that does not exist with on-premise ERP solutions.
The new breed of solutions on cloud can be deployed quickly, leading to faster returns. Besides, you only pay for what you use. This can considerably bring down the cost incurred on ERP. You also end up freeing valuable resources that are stuck in maintaining legacy software and infrastructure, and instead, focus on your main business goals and initiatives.
With each passing day, modern enterprises are recognizing that the migration of their ERP systems to the cloud would, in fact, eliminate the major obstacles that they face with on-premise solutions. Cloud-based ERP solutions not only cut down on the hardware costs, they also greatly reduce the operational costs. Additionally, this eliminates the requirement for an extra IT support team to periodically upgrade the system and patches manually.
THE BEST OF BOTH WORLDS
Gartner predicts that ERP deployments over the next five years will be hybrid in nature, ie, a combination ERP on-premise as well as on cloud. It involves a cloud-based ERP solution integrated with a smaller ‘core’, based on an on-premise solution.
The hybrid or two-tier ERP model lets you preserve your on-premise ERP investments, while equipping global subsidiaries with a more agile, flexible cloud-based ERP/financials system, and giving headquarters the real-time visibility it needs.
Modern businesses are well-aware of their options and are considering various combinations. There are many advantages of implementing a hybrid model—it can be employed at a faster rate as compared to in-house applications, and gives a better visibility of site location through an inherent dashboard. Also, Gartner expects to see a 30% migration to cloud-based ERP solutions amongst service-centric companies by 2018.
Whether you are pondering to implement an ERP solution for your business or to migrate your existing ERP solution to the cloud, do your homework and gauge the efficiency of the product and requirements of your business before taking the big leap.