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On Premise to Cloud Migration - Moving Your ERP to the Cloud

On-premise to cloud migration for a small business isn’t as simple as uploading information to the internet. It’s a gradual process that can take months to complete.

To successfully migrate from on-premise to the cloud, a business must have a solid strategy, key performance indicators (KPIs), and excellent enterprise resource planning (ERP) software like  SAP for small businesses. And even after your processes have migrated, you'll still need continuous support to tie it all together. 

Below, you'll find a brief primer of what to expect from on-prem to cloud migration.

What is Cloud Migration?

The first step to migrating to the cloud is to understand what it is. The cloud is a network of remote servers used to store, manage, and process data. Cloud computing is the delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale.

Cloud migration, then, is the process of moving operational processes from your on-premise infrastructure to a cloud provider. That means applications, servers, and data writ large, are hosted on the cloud.

To be more specific, here are some examples of business processes that can be moved from on-premise to cloud providers:

  • Storage and backup

  • Database management

  • Messaging and collaboration

  • Financial and Human Resources (HR) applications

  • Customer Relationship Management (CRM) applications

  • Disaster management

Depending on your business, a large-scale cloud ERP solution can handle just about everything you throw at it. So, it’s important to have an execution plan from the start for your cloud migration project .

Before moving on to what that plan should look like, it’s worth spending a little time going over why moving to the cloud is a good idea.

Benefits of Migrating to the Cloud

Here are some benefits of cloud migration:

Greater Scalability With Cloud Resources

The cloud offers infinite resources that enable flexibility for businesses to grow. You can increase or decrease storage, memory, and computer processing to meet changing supply and demand.

Cloud-based applications and infrastructure can be quickly provisioned or de-provisioned to meet the needs of users. For example, an e-commerce site that sees a surge in traffic during the holiday season can quickly provision more servers and storage to accommodate the increased demand.

Cloud Maintenance Costs Are Lower

Maintaining on-premise data centers requires paying for hardware, electricity, and IT professionals. Moving to the cloud gives you the choice to cut down on your costs by paying only for the resources you need.

While a data migration service is a involved process to get started, the long-term returns are well worth it. 

In addition, the scalability of cloud solutions also plays a crucial role in cost reductions. You can pay as you go for storage, servers, and other resources, which gives you more fiscal flexibility. In addition, cloud providers often offer discounts for long-term contracts, which can further lower your costs.

Migrate for Improved Performance in the Cloud

The cloud is accessible anytime and anywhere. It improves business performance as the people who need to access your tools can always do so, and—with the right provider—it’s also backed by a worldwide network of cutting-edge tech, keeping network latency low and effectively safeguarding data.

Even if you’re only getting a “slice of the pie” so to speak, cloud computing gives you access to a much more robust infrastructure than most businesses have the resources to set up on-premise. This is one of the most overlooked features of migrating to the cloud since the time and efficiency gained from performance increases are highly distributed and don’t always become apparent until after an extended period of time.

Migrate for Better Security in the Cloud

Cloud service providers often go above and beyond when it comes to security and compliance. They keep up-to-date with trends and laws to keep your data safe, and you can be sure that your information won’t be lost, stolen, or misplaced.

In a very real sense, security breaches can spell financial ruin for cloud service providers. That’s why major cloud ERP providers like SAP spend Billions of dollars a year on research and development for security.

Types of ERP Cloud Migrations

Cloud migrations, broadly speaking, can be divided into six categories. However, for the purposes of ERP cloud migrations, only three of those strategies really apply.

The strategy you choose will depend on your circumstances and goals. But it will also influence your utilization of resources, affect the capital requirements of your migration and dictate the timeline of your migration.

Lift and Shift Cloud Migration

The simplest form of data migration is the lift and shift. You literally take everything—servers, applications, data—and move it to the cloud. The advantage of this method is that it’s relatively straightforward and can be completed quickly. However, it doesn’t offer any real optimization and can be expensive. Not to mention, it doesn’t take full advantage of all the features that cloud migration can offer.

Application Refactoring in ERP

Refactoring is the most time-consuming way to do a cloud migration and it’s typically not one we recommend for an SME. It essentially means adapting your existing ERP software with custom code to take advantage of cloud-hosted features.

Re-purchasing in ERP Cloud Migration

Unless your organization is too deeply invested in an on-premise ERP solution, re-purchasing is often the most straightforward cloud migration strategy.

Re-purchasing refers to simply replacing your on-premise ERP with a cloud-native solution. It doesn’t leave anything up to chance because there’s no need to integrate legacy systems with modern cloud-native solutions. In fact, some organizations rely on such outdated systems that the only fiscally responsible solution is to choose the repurchasing approach. Anything else would mean using far more resources than is necessary and restructuring old features that have far more efficient and newer alternatives.

With few exceptions, one of these strategies will ultimately suit your needs. Choosing the right one can be a complicated decision, but one you can’t afford to ignore.

Designing Your Cloud Migration Strategy

Without a good strategy, your cloud migration efforts might end up with hampered performance and increased costs. Here are the steps you must take to do it properly:

Make a Plan for Cloud Migration

First, determine what data you’re moving, why you’re moving it, and how you’re moving it. The answer to these questions will govern the entire process and help you figure out which aspects of your business are better off in the cloud, and which ones may be more useful on premise.

Without this step, you run the risk of making the cloud migration much more complex than it needs to be. And, perhaps more importantly, you also run the risk of overspending during the migration on assets that you won’t really need.

Pick a Cloud ERP Service Provider

After you have a plan, it’s time to start looking for a cloud ERP service provider. Not all providers are created equal and new players are consistently entering the market.

If you want to smoothest migration and aren’t too excited about untested providers, go for a safe bet like SAP. SAP has been in the ERP business longer than just about anyone else, and they’ve been on the cutting edge of cloud technology since the early days of the cloud (at least from a business perspective).

Some common cloud migration factors to consider when picking a provider:

  • The provider’s customer base

  • Level of expertise

  • Security and compliance

  • Customer support

  • Financial stability

  • Migration costs

Cloud migration services are nothing new, but the market has heated up in recent years as companies of all sizes are moving more data to the cloud.

As a consequence, there is an increasing number of cloud migration service providers that don’t necessarily have the needed experience to ensure a smooth transition.

Reserve Internal Resources for the Migration

In addition to working with a cloud migration partner, you should also make sure to allocate some internal team members to the project. It’s important for at least some employees to have a detailed understanding of the process so you can avoid unforeseen issues later on.

It’s also important to make sure that you’re not overburdening your staff during the migration. If necessary, extend the time frame of the migration to ensure that critical business processes aren’t badly impacted during the move.

Establish KPIs for Your Move to the Cloud

Adjust your KPIs to fit the new architecture so you can pinpoint any unexpected problems with the migration. Migrating just for the sake of keeping up with current technologies is not a bad approach and can save you a lot of headaches in the long run. However, it’s important to also have a set of performance goals in mind before you begin your migration.

The benefit of setting these expectations ahead of the cloud migration plan is that it can lead to a frank discussion with your cloud migration partner about whether your expectations are reasonable.

Also, without these goals, you give yourself a false sense of control and can end up wasting a lot of time and money on changes that don’t really improve performance.

Execute Cloud Migration

Once you have a solid on premise to cloud migration strategies in place, execute your cloud migration as planned. Don’t migrate everything at the same time—it’s best to start with a small set of data or applications as a test, then work your way to the other aspects of your business. Be prepared to make adjustments along the way.

Post-Migration

Once you’ve completed your cloud migration and everything is running smoothly, the post-migration phase is the next task at hand. After a cloud migration, you will continue monitoring your KPIs and make sure you’re still on track to reach your goals. Adjust as needed with the help of your service provider.

Perform Maintenance Checks and Data Collection

After you getting everything you need migrated to the cloud, all that’s left is to perform regular checks to ensure that everything is complete and updated and that your KPIs are being reached.

Now, it’s important to note that the technical aspects of the migration are only one side of the equation. To successfully take advantage of everything the cloud has to offer, you’ll also need to invest in the adoption of new processes and training personnel to use cloud-based services to improve performance.

That process is outside of the scope of this guide, but it’s something that we help our partners with when migrating. Our goal is not only to get our customers on the cloud but also to help them realize the full potential of their investment for years to come.

Challenges of ERP Cloud Migration

Businesses can migrate their ERP applications and data through the cloud according to their preferences and schedules. And, with the right partner, it can be a streamlined and painless process.

However, cloud migration can also be a daunting task, as it can demand significant resources and have significant costs associated with it. Further, it involves a great deal of planning, organizational change, and business process transformation, which can be time-consuming.

One of the common challenges we see in failed migrations is gaps in the implementation strategy. And, generally, these gaps stem from attempting to do too much at once instead of using a phased approach.

Another speed bump that tends to show up is a disagreement about who should spearhead the migration. An ideal scenario is when the entire organization is on board and willing to pitch in to make the transition quick an painless. But that tends to not be the case a lot of the time.

At the least, organizations should aim to have key principals involved in some way with the process. C-level executives should make it a point to invest some time to present the migration as a business-critical process and ensure all personnel is aware that their support is both necessary and expected.

Move to the Cloud With SAP Business One

Many small businesses use ERP systems to migrate to the cloud and integrate processes and data. With this software like SAP Business One, you can streamline every aspect of your business in one platform, increasing transparency, productivity, and scalability throughout. Ask us how you can move to the cloud with SAP Business One today!

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