With the starring role that cloud services play in operations today, and agentic AI just around the corner, it is safe to say that the days of on-premises ERP are numbered.
Your business may still function right now with an on-premise ERP, but operational efficiency is not what it would be if you had end-to-end real-time visibility, easy connectivity with marketplaces and cloud-based systems, and a system always operating with the latest technology. Agentic business AI? Nope, that’s only for cloud-based ERP solutions.
The good news is that migrating from on-premise to a cloud-based ERP solution is easier and less costly than your last systems migration. It still is a heavy lift, but a lighter one.
You can also migrate more easily if you start with a structured, phased roadmap that breaks down the process and helps ensure that you don’t miss any critical steps.
We’ve been helping businesses move operations to the cloud for more than 10 years as a leading cloud ERP implementation partner. Here’s our roadmap for organizations that are moving from on-prem to the cloud.
The migration from an on-premise backend to cloud ERP starts with making the business case for the move.
There are a number of elements you could stress, most notably the shift toward autonomous operations via artificial intelligence and your organization’s inability to take part without cloud ERP. But other leading factors also could be reduced IT costs, added operational flexibility, increased visibility, better business intelligence, or the need for cloud ERP to support new business models and revenue streams.
Once you have the business case, you next must get executive buy-in for the migration. Cloud ERP isn’t actually a technology upgrade; it is business transformation. You’ll need executive sponsorship and alignment for the many positive changes it will bring to your organization.
Next, review and document the current state of your business. This includes not only your technology footprint and the functionality your business uses today, but also your organizational readiness and the processes in place at your company. You need to understand your current state so you can ensure your cloud ERP meets both future and current needs.
During this assessment, also start cleaning up your existing business data. Over the course of years, your existing system has accumulated a fair amount of bad or useless data. You don’t want to bring this messy, incomplete, and wrong data forward. As you clean your data, you also will want to standardize it for easier export.
There are two primary ways that your business can live in the cloud. You need to pick the right one for your organization.
The first option is a private cloud deployment. In this scenario, your ERP is in the cloud but you still are responsible for maintaining the system just like your existing on-premise ERP. The upside of this option is that you have more customization potential and better control over data governance. The downside is that you have more cost, complexity and probably don’t actually need this extra control.
The better option in many cases is ERP in a multi-tenant, public cloud environment. Public cloud ERP such as SAP Cloud ERP is equally secure and almost as adaptable as a private cloud implementation, but it is maintained by the ERP vendor in a multi-tenant environment. You get a faster implementation and both less costs and maintenance headaches, but with a little less control. Most businesses don’t actually need this extra bit of control, however.
The key to a fast implementation is using the industry best practices built into cloud ERP by default instead of adapting and customizing the system for in-house processes that don’t actually drive real competitive advantage. By fitting your business processes to industry standards, you save time and improve operational efficiency at the same time.
The second part of an efficient, successful migration to the cloud is rolling out the system in phases. Instead of moving your entire business to the cloud at once, start with core business functions such as finance and progressively bring other parts of the business online in stages. This reduces the scope of the migration and enables a more orderly transition.
Critically important for a successful migration to Cloud ERP—or any systems migration for that matter—is comprehensive testing before go-live. Validate that each workflow and function in the new system operates as expected, that imported data shows up correctly, and that all integrations perform properly.
We recommend system testing on an ongoing basis as you configure each part of your cloud ERP implementation, or at least testing sprints carried out regularly.
Equally important as testing is change management. Moving your organization from a legacy on-premise ERP to a modern cloud solution will digitally transform your business and alter existing employee workflows. Creating employee buy-in and adoption requires meaningful change management. Don’t shortchange this human part of the migration process.
Even the best ERP rollout will inevitably have some hiccups.
So the final step in the process of migrating from your existing on-premise ERP to a cloud-based solution is going live with the new system and addressing any issues you encounter during the first few weeks after launch. When supported by a good implementation partner, most of the systems work after launch will be optimizing the ERP. But inevitably, there also will be a few gremlins you will need to address.
Most of these issues and optimizations should be relatively easy and handled through changes in configuration settings.
For more on the cloud ERP selection and implementation journey, download our free guide, Understanding Cloud ERP. You can also contact one of our experienced consultants for help at (801) 642-0123 or by emailing us at info@nbs-us.com.