Upgrade old ERP with cloud ERP
Enterprise resource planning (ERP) systems as we know them have been around from more than two decades. however, much like the now obsolete pagers, on-premise, ERPs are starting to show their age.
Gartner, an Independent research firm recently published a report about the impact of the cloud on ERP systems. The research concluded with the bold statement that highly customized on-premise ERP systems will be relegated to legacy status by 2016. This means they will no longer be able to meet the requirements of companies and consequently become a drain on resources.
Below are some factors which led to demise of these costly legacy ERP systems.
Cloud computing has open new paradigm for ERP system implementation. The clouds have been more reliable than on premise servers. The internet speed and improved web application technology have allowed ERPs hosted on cloud equally or even faster than on-premise ERP. But unlike on-premise software which can be accessed only from office premise, the cloud ERP can be accessed from any place at any time. As technology has changed the human behavior and client no longer want to wait for you to be in office to give them needed answers. Mobile applications of these ERPs can ensure you always have all the business information on your fingertips.
ERP hosted on cloud also provides significant flexibility in terms of accessing the ERP from anywhere at any time. By this feature, you can also allow your clients to have some level of access of ERP through E-Commerce website allowing your system do forward integration. Further, cloud allows swiftly increase or decrease hardware resources as per the load on system, which can never be possible with on premise ERPs. This is why many business leaders are finding their on-site ERP systems are no longer up for the job.
To keep up with the demand for more agile and responsive systems, the IT managers had to do a lot of customization with legacy on-site ERP systems over period of time. This leaves little room for further changes in the system. While all these latest functionalities you get out of the box in new ERPs. This gives higher flexibility of update and upgrade of the system.
In addition, the cloud was purposefully designed for easy interoperability, which adds the option for current or future usage of additional products. There are not likely to be interoperability worries if changes need to be implemented to hardware or software. More importantly, cloud ERP systems are completely scalable and can grow with the business.
For example, if you decide to sell online, integrating these online orders with on-site ERP may not be feasible, which will leave you with fragmented data and lack of overall visibility. But given most of recent cloud ERPs are module based development, integrating your online business with ERP can be question of installing or customizing on correct plug in.
Most businesses are reluctant to upgrade their outdated ERP systems due to huge initial investment that has been sunk during the implementation. In addition, upgrading the same ERP, which is highly customized can be a lengthy and difficult process. There can also be downtime associated with the upgrade of these legacy systems, which make business owners vary of any upgrade. This has left them to be so outdated technologies that have become a drain on the resources.
In contrast, cloud ERP systems are much more cost effective. As web-application based ERPs hosted on the cloud doesn’t require companies to install or change any hardware. This will save companies from large upfront costs for things like servers, related hardware and software licenses. The cost of hosting is spread out on a monthly or annual billing basis. One of the biggest benefits of cloud ERPs is upgrade and maintenance of servers can be taken care of by the vendor. So there is no requirement of in house IT team. There is no need to spend weeks upgrading the systems, same done centrally by the vendor with no downtime.
On-site ERP status: legacy
A lot has changed in the last few years as cloud ERPs have become more prevalent. Even though the basics of what managements want from ERP systems has not changed much, but Focus has now shifted to decreasing IT costs with achieving greater functionality and flexibility. CEOs want more reliable and integrated ways to manage resources.
It seems that the days of the integrated on-site ERP system are numbered. A diminishing lack of flexibility, functionality and cost effectiveness is making the monolithic on-site ERP systems go the way of the pagers. In its place, companies are turning to cloud ERP solutions that deliver the functionality and flexibility that the IT-controlled and centrally-mandated on-site ERP mega suite previously struggled to provide.
MD, Finbyz Tech Pvt Ltd