7 Reasons to Consider an ERP Cloud Solution
Posted by Shelby Klingerman
- Last updated 1/25/23
Rudy Lukez, Director of ERP Product Marketing at Oracle, wrote an article about seven reasons to consider an ERP Cloud solution for your organization.
Lukez explained that for medium and midsize businesses, retiring their on-premise systems and moving entirely to the cloud all at once isn’t possible—or at the very least, it’s not something they’re comfortable doing for a variety of reasons. Meanwhile, staying the course and ignoring all the advantages of enterprise resource planning (ERP) as a cloud solution is no longer an ideal path, either.
One way to approach this problem is to consider a hybrid deployment. This model uses one or more cloud applications in conjunction with existing legacy ERP. With this smaller, yet important, step toward the cloud any business can quickly gain key benefits of a cloud solution even when it is not able to make a clean break from its legacy on-premise ERP modules.
This hybrid model approach allows businesses access to the benefits of cloud solutions. It also lets them gradually become familiar and comfortable with cloud solutions—albeit the “cloud lifestyle”—rather than experiencing a major shift all at once.
7 Reasons to Consider an ERP Cloud Solution
Reason No. 1: Readily Adopt New and Evolving Technologies
Next-generation technologies, like artificial intelligence (AI), help Cloud-based systems rapidly improve their capabilities with no need for periodic updates, unlike an on-premise system.
Lukez provided an example from his own experience. At Oracle, the expense reporting application now parses information from the corporate credit card. Now, when Lukez checks out of a hotel, for instance, the system categorizes the expense, determines how many days he stayed, and how to categorize related expenses from the entire trip. He does not initiate this change. It just happened and was a significant improvement from his last expense report experience.
Now, with no additional or new input from Lukez, expense reporting is significantly easier, and Oracle has better information on employee travel costs. These kinds of improvements are continual in an ERP Cloud system.
Reasons No. 2: Attract In-Demand Talent
The next generation of young workers has grown up with seamless technology that is mobile, easy to use, and always-on. No company that continues to rely purely on the last century, on-premise technology will be able to recruit top talent, regardless of age.
This is particularly urgent for the manufacturing and public sectors, which need to make themselves as appealing as possible to attract people with the right skills. Manufacturing is expected to have 2.4 million jobs unfilled between 2018 and 2028, according to Deloitte. Additionally, a graying public sector highlights the recruitment challenges for government organizations—just 17 percent of federal workers are under 35 years old, compared to 40 percent in the private sector.
Reason No. 3: Extend the Value of Existing Applications
If it is difficult to switch, for whatever reason, from an on-premise to a cloud system, augmenting and integrating legacy software with cloud applications can complement, enhance, and supplement a myriad of important tasks including those that are incomplete, behind, or manual with existing systems. This approach can breathe new life into legacy ERP. It also gives businesses a great opportunity to start adopting cloud capabilities, and the associated change in operational SaaS lifestyle, while winding down their legacy software.
Reason No. 4: Access Better Tools
Finding Cloud applications that complement your legacy ERP software modules lets you immediately take advantage of rapidly advancing new technologies and improving user paradigms. For example, you might not be prepared to move your core financial processes and data to the cloud, but your enterprise probably needs improved reporting and analytics around common business activities like procurement. This makes a great case to use a standalone cloud application, such as Oracle Procurement Cloud, or Oracle Enterprise Performance Management (EPM) Cloud. These provide complimentary systems that deliver immediate business capabilities and value without a fundamental change in your operations.
Reason No. 5: Reduce Third-Party Dependencies
Reporting and analytics for legacy on-premise systems typically require involvement from a third-party vendor to access your data and generate operational business intelligence. Using cloud applications from your legacy ERP vendor often produces the same or better intelligence without needing an additional vendor relationship. By moving this critical capability of your operation to the cloud, you improve your operation without adding the complexity of a new vendor relationship.
Reason No. 6: Evolve Your Systems
On-premise software for enterprises has its roots in the 1960s with main-frame based MRP. Those legacy systems were never meant to be reporting engines with modern and colorful graphical outputs simply because the technology didn’t exist. Outside of printing on green bar paper with big-impact line printers, there was no practical way to produce sophisticated business intelligence that was both real-time and easy to understand.
Today’s options are vast, with graphical outputs that are worlds away from the era that birthed on-premise ERP software. Cloud-based technology was born in the last decade and developed, as a core principle, with an entirely different mindset and understanding of not only what was possible but what was needed to be successful.
Reason No. 7: More Robust Security Resources
Lukez often asks legacy ERP consumers, “How many people work at your company 24×7 full time on security?”
In most cases, it’s a very small number, and sometimes it is zero. Cloud solution service providers have large, full-time teams that are exclusively dedicated to proactively monitoring and staying current with cloud security issues and threats, 24 hours a day. Moving operations to the cloud gives your company an almost unimaginable layer of security firepower not possible for typical legacy on-premise systems.
Test Driving the Cloud
It is both wise and part of human nature to try something before you’re willing to make a significant purchase. It is why people test drive cars before they buy a new vehicle. Incorporating a few cloud applications is one way to do that for any legacy ERP system. For example, businesses may feel a need to improve their data reporting, but believe moving to an entirely new system is too much work or requires too much organizational change. Yet, since every company at some point buys things or service, trying a procurement solution can demonstrate how the cloud works and simultaneously build organization confidence. A one-cloud solution project is an easy way to test the waters associated with a modern cloud lifestyle.
Once people start using the cloud, they start to understand the benefits and get a clearer picture with practical experience of what moving from on-premise ERP software is like. It’s a way to prove the concept and get excited about the experience, without the anxiety of a big all-at-once change.
But be forewarned. The results will be positively infectious across your company. Once your enterprise experiences that first taste of the cloud, get ready for an accelerated push to move all your legacy ERP software to the cloud sooner rather than later.
Because, as a society, we never use a reverse gear with any technology. The only direction is forward. And the only question rapidly becomes: “How fast can we move forward and adopt important new technology?”