Three years ago, the term "cloud computing" was borderline a foreign language. But now, to say that "there is a lot of buzz" surrounding the very same term, would be the understatement of the decade. But what does all of this buzz mean, and is it right for your business? In the following, I will focus on ERP as a cloud service, or as it is sometimes coined, software-as-a-service or SaaS.
But before we jump into whether cloud ERP is right for your business, let's take a minute to make sure we are on the right page as to what cloud ERP is. In basic terms, a "business cloud solution" can be understood as a remote resource or tool that can be delivered and/or made available over a network connection to portable computers, smartphones, tablets, etc. As part of this service, there most likely would be a database that your end users are attempting to access. If said database is only available to your authorized users, it would be referred to as a "private" cloud. But, if the cloud server is being shared, it would be considered a "public cloud." In both scenarios, the tool(s) look, feel, and behave as though it is a traditional software application that is installed on your local machine. And the neat part is that the remote server could be located in the next room, or on the other side of the planet; and you can access it from anywhere, at anytime.
Ok, so now that we both understand what cloud computing is, many people are concerned that if a company is paying monthly for access to their cloud-based information, isn't there a point when the subscription fees surpass the upfront costs of a traditional on-premise ERP system?
In short, cloud ERP solutions provide excellent cost benefits. To clarify, an ERP system that runs on the cloud requires a fraction of upfront investment to both license and deploy. Why? Well, the answer is simple. The system's foundation has already been installed, tested, and re-tested, and is essentially ready for use. In addition, many companies like SAP, take it further by preconfiguring the solutions to common industry needs, thus further reducing time and material bills you would likely see in a traditional implementation. Also, by it very nature, your are "subscribing" to the technology, so annual maintenance and having to replace aging servers is a non-issue. This alone can save you thousands of dollars from the get go.
However, what is not so easy to see is the true "cost savings." By investing or moving into the cloud, your business just bought the latest release for your ERP package, and access to future releases is now free and effortless. In short, this means that the big maintenance check you have been paying is gone, and your shiny, new ERP solution, like SAP Business ByDesign or SAP Business One On Demand is nestled safely and securely in a world-class data center that you don't have to manage and/or maintain; all accompanied by disaster recovery, backups and redundancy and all the security you can imagine. Simply put, the per user/per month investment is not just a license. It is a predictable cost model for a full ERP solution that grows with your business.
With all of this in mind, it is critical that at this point, you ask any potential vendor three questions regarding their cloud services.
1) Do you offer pre-configuration of this application for my industry. If not, what are your plans to do so?
2) Does this application allow me the flexibility to bring it in-house at a later date should I wish to?
3) Are their penalties for discontinuing users or functional areas/work centers? If so, what are those penalties?
If you are interested in learning more, or you are ready to begin evaluating ERP solutions, contact us today. Navigator, SAP's #1 Global Partner for Small-Midsize Cloud Solutions, delivers extended functionality via a safe and sure private or shared cloud environment that is housed in one of SAP's world-class SAS-70 Type 2 Data Centers.
