Cloud enterprise resource planning (ERP) solutions are changing the way many businesses operate. Unlike their on-premise counterparts, cloud ERP allows for bespoke functionalities alongside increased scalability, flexibility and security. Furthermore, time spent on maintaining systems is reduced, which further bolsters productivity and encourages innovation, as companies are always running on the latest version.
However, according to a recent report from Gartner, companies without a plan in place for managing the transition away from on-premise systems are sinking considerable sums, without enjoying the benefits. The research found that £6.7bn is wasted on idle and under-utilised cloud resources each year.
While it’s one thing for a business to make the transition from an on-premise to a cloud-based ERP solution, if they want to reap the full rewards, they need to adopt a cloud mindset throughout the organisation. This involves convincing management of the merits of the technology, and ensuring processes are in place in anticipation of the new set of expectations the transition can usher in, such as the ability to work remotely.
Conducting an audit
The first step businesses should take is to carry out a thorough, company-wide audit to identify activities and bottlenecks that could be improved by moving away from on-premise solutions.
Generally, the older an organisation, the more intricate and tangled its processes and systems, and unpicking these knots can prove challenging. However, by doing this, companies can ensure that any transition they make towards new technologies is targeted and strategic.
An effective process audit will ensure performance sits within a desired range, and that controls are in place for the correct measurement of process efficiency. It also involves defining the metrics for success and keeping a close eye on the impact of processes on these measures.
Communicating the benefits
Once you’ve determined which areas will benefit from a move to cloud technology, it’s important to highlight the value to ensure business buy in.
In manufacturing, for example, a cloud-based ERP system bridges the communication gap between the shop floor, back end, and planning and control systems. It forms an arterial route through which information can travel automatically and instantaneously.
Another major advantage of migrating to the cloud is the security it offers. Security today is a comprehensive, end-to-end mindset that must be built across every layer, from the physical network interface cards, to the user passwords and, as a result, cloud automatically becomes a more secure alternative.
Moving away from on-premise solutions also allows businesses to reduce IT budgets and sidestep the complexities of purchasing and managing hardware. The ability to create “bespoke” packages, with businesses able to pick and choose functionalities as needed, means it’s simple to scale resources up or down based on changing business needs.
Embracing organisational flexibility
Finally, if businesses want to get the most out of cloud ERP, they need to cultivate an agile business culture, able to adapt to today’s ever-shifting technological landscape.
Alongside technological transformation, businesses must be prepared for the predicted transformation of organisational structures. In the future, it’s expected that the internal structure of a business will become far less rigid, moving towards a model that more closely resembles a flexible network of satellites. Businesses will employ only a few full-time staff, assisted by a team of remote freelancers, ad hoc project managers, and part-time employees.
In a system such as this, embracing technologies like cloud ERP that support remote working and real-time data updates, becomes a necessity. It’s vital that users are given the freedom to access data from any location, allowing them full visibility of the business whenever and wherever necessary.
By not updating their technological arsenal with the latest cloud-based ERP solutions, businesses are missing out on a number of business values, including real-time assessment and reporting, alerts of bottlenecks and preventive operations, real-time software updates, and a secure platform to store their data.
It’s equally crucial, though, that businesses commit to building out the necessary support structure throughout their entire organisation to underpin technological change.