Cloud ERP adoption is on the rise as companies look to leverage the value of on-demand data capture and real-time visibility, while recent research notes that low implementation costs are also a driving factor for SMEs and large enterprises alike.
Despite the diverse benefits of cloud ERP software, however, these solutions can’t solve complexity in isolation; without the right IT groundwork, even the best cloud ERP business solution won’t deliver desired outcomes.
As a result, it’s critical for companies to both identify and address potential issues before making the move — here are five ways organizations can avoid cloud ERP implementation failure and maximize the impact of IT investments.
i) Know Before You Go
Data is your organization’s most important resource — but what happens when you move to a cloud-based ERP provider? Before making the switch, it’s critical to consider three key questions:
Where will data be stored?
As noted by Canadian Manufacturing the move to cloud-first frameworks doesn’t mean “cloud only” — but does require an assessment of potential ERP options and where your data will be stored.
For example, true cloud solutions such as Sage Intacct allow companies to shift data into the cloud for enhanced resource access and ERP response, while options such as Sage X3 allow organizations to choose cloud, on-premises or hybrid deployments to best suit data storage needs.
How will data be accessed?
How will staff access critical data? Will providers have any access to this information? Under what circumstances? To ensure compliance and regulatory expectations are met, it’s essential for companies to ask these access questions before shifting to cloud ERP business solutions.
What happens to data if you switch providers?
Companies may outgrow current ERP providers as operational needs change — but what happens to data stored on cloud servers? Here, it’s critical for companies to read and review any ERP SLAs to ensure information isn’t held hostage if they ever change providers.
ii) Ensure Internal Collaboration
One of the biggest benefits offered by ERP or cloud ERP software? Streamlined collaboration. When staff are all using the same apps under the same functional framework, seamless collaboration and communication is possible.
The caveat? Existing processes may frustrate this effort. As a result, it’s critical to evaluate your current level of inter-departmental integration — are processes simple and streamlined or cumbersome and time-consuming. Here, the rule is simple: Cloud ERP deployments can’t fix existing functions; instead, they amplify current operations. By addressing potential integration pitfalls before beginning ERP implementation, companies can avoid costly mistakes.
iii) Solve for Silos
Departmental and application silos remain a problem for many organizations — and if data is siloed under current processes, cloud ERP won’t solve the issue unless you’re prepared for a strategy sea-change. Here’s why: While new cloud solutions offer the ability to collaborate and communicate across departmental barriers, they can’t deliver improved efficiency if staff continue to use legacy word processors, spreadsheet software and time-tracking tools.
To ensure implementation goes as planned, it’s essential to on-board staff as soon as possible. Start with surveys; ask employees where processes could be improved and what functions they need. Then, select a cloud ERP business solution that addresses these concerns and ensure the adoption process is timely and transparent to avoid potential silos.
iv) Confirm Functional Flexibility
Remote work is now a fact of life for organizations — and many plan to continue offering work-from-anywhere options for the foreseeable future. But not all cloud ERP software delivers the same level of functional flexibility. While some solutions excel at on-premise performance, they may struggle to deliver on mobile-first mandates.
Best bet? Have a frank and honest discussion with your potential provider about integration and customization of flexible work solutions to ensure you’re getting exactly what you need.
v) Consider Your TCO
Cloud computing initiatives are often prioritized for their cost-cutting potential — instead of the large capital expenditures (CapEx) required for physical hardware and system maintenance, companies look to save money with ongoing operating expenditures (OpEX) for services on-demand.
Over time, however, OpEx can add up — and if companies aren’t making best use of cloud ERP systems, these solutions may end up being more expensive than their on-site counterparts. As a result, it’s important to consider your total cost of ownership (TCO): Beyond up-front and monthly costs, how much do you save in time and labor? Do these savings scale over time?
By tackling TCO sooner rather than later, companies can avoid overspending on cloud ERP implementation.
One more bonus tip:
Improving Implementation Outcomes
The right cloud ERP system can help scale your business, cut operational costs, save time, improve end-user productivity and ideally recover your software ROI in less than six months.
But getting the most from ERP implementation means avoiding potential pitfalls by leveraging the right data location, ensuring internal collaboration, solving for silos, confirming flexibility and considering your total TCO.
At IWI Consulting Group, we’re proud to be Sage certified consultants. As a Sage partner, it’s our mission to help Canadian companies implement and integrate cloud offerings including the Sage ERP solution, Sage X3, Sage Intacct and Sage 300.