What is the Cloud? The Cloud Demystified

On-premise ERPs once garnered great value for businesses. However, as technology continues to grow and change, the Cloud has rapidly grown into many organizations’ “go-to” solution for all their optimization requirements, including infrastructure, performance, availability, and accessibility. In addition, moving to the Cloud allows organizations to take advantage of today’s technological advances in areas such as digital, AI, mobility and automation, which may no longer be achievable on their current on-premise system. This allows organizations to attain a competitive advantage, generate value and foster growth by utilizing the benefits of new technology and enablers that the Cloud provides.   The Cloud can be broken down into three different Service models:

1. Software as a Service (SaaS): often used to describe the Cloud, SaaS supplies everything you will need to run an application. SaaS providers create applications on top of the infrastructure from both PaaS and IaaS and tend to supply the basic components for an on-premise application. 

2. Platform as a Service (PaaS): consisting of both hardware and software, PaaS is particularly useful for software developers. The platform provides management for many system components. Cloud users are unable to see the infrastructure, only the platform itself. 

3. Infrastructure as a Service (IaaS): a full-suite model that includes hardware, software, storage, servers and other elements of a company’s IT. Also provides a pool of shared resources, networks, and storage.

  The Cloud also consists of 4 deployment models:

1. Public Cloud: Controlled by Cloud service provider and available on a pay-as-you-go basis. 

2. Private Cloud: Cloud that exists solely for a single organization. Managed by the organization itself or by a third-party vendor. 

3. Community Cloud: Cloud shared amongst several organizations with a common tie. Managed by the community or by a third-party vendor. 

4. Hybrid Cloud: A mix of two or more of the Cloud types or with on-premise systems. enables you to complement and augment your existing enterprise application.

Why Upgrade to the Cloud?

According to Gartner, the idea of a single, cohesive ERP suite that satisfies all the needs of an organization has been replaced by a hybrid ERP approach that integrates Cloud Point solutions with a smaller “core” of on-premises ERP function, such as financials and manufacturing. Gartner predicts hybrid ERP environments will be the norm within 5 years. Cloud computing is now a well-established, trusted and somewhat essential method of storing data that is still growing rapidly. The Cloud has a host of benefits that can allow your organization to enhance its performance quickly and safely with relatively little capital costs. According to the IDC, by 2020, it is estimated that revenue for public Cloud IT services will surpass $204.5 billion, and continue to grow at a compound growth rate of 21.5% between 2016 and 2020, approximately seven times greater than the overall IT growth rate. In IDC’s 2016 CloudView Survey, 62.7% of the 6,000+ IT organization participants noted that they were currently or in the process of using public cloud infrastructure
as a service (IaaS). In the future, it is predicted that the popular “cloud-first” strategy may become a “cloud-only” strategy. Thus, moving to the cloud would be a strong option for your organization, especially in the overall IT growth rate. The IDC also predicts that by 2020, public IT Cloud services will make up 58% of the overall $355 billion spent on applications, tools for development and deployment, storage, software, and servers.   Here are just a few reasons why you should move to the cloud:

Saves Time and Money

When it comes to your ERP system, failing to implement new advances can stall your company’s growth. Therefore, ERP upgrades ought to be seen as a valuable asset that ensures you save money over the long term. In 2017, Oracle CEO Mark Hurd noted that 80% of most IT budgets are dominated by routine maintenance of on-premise data centers, while the additional 20% is being diverted to addressing new security and compliance requirements rather than focusing solely on enhancing customer service or fostering innovation for the organization. However, moving to the Cloud would automatically reduce nonproductive costs by 30%. Furthermore, moving your ERP system to the Cloud allows for significant cost reductions as it may cost you more to maintain your current ERP than to transition to the Cloud. Upgrading can provide a significant Return on Investment (ROI), even taking into account the total cost of ownership (TCO). While an upgrade may seem like a substantial cost, it saves you money in the long term and vastly improves your ability to do business. It’s also probably a lot less expensive than you think. Upgrading ERP needs to be done right to ensure you get the system that works best for you. Due to a dramatic drop in the need for consulting and maintenance, companies on average have been shown to have a 15% drop in IT spending, 40% drop in consulting expenses, 25% in payments to IT staff.

Instant Access to Data Anywhere, Anytime

In modern business culture, not having immediate access to information is a competitive disadvantage, regardless of your industry. Consumers have a wide variety of choice, and if you can’t give your customer an immediate answer, they can switch to your competitor who can. By the same token, if you’re the one with the answer, you can beat out the company that’s also vying for that customer’s business. Inefficiency and lack
of immediate access to information is a competitive disadvantage. Luckily, Cloud-based ERP is accessed through the internet via an online subscription service; thus, the software is not installed on your local servers or in-o ice hard drives and can be accessed 24/7 no matter where you are, whether it’s at work, 
at home, or on-the-go. Improving your ERP to a Cloud-based solution means real-time access to the same information from everywhere, so your employees can serve clients wherever they are and don’t need to check in to the o ice.  

Growth and scalability for Your organization

You can scale your ERP by following compliance rules and satisfying the need for information to use in reports for both the company and its stakeholders. As you grow and scale your ERP accordingly, you will need to satisfy your own need for information and that of stakeholders. Scalability in ERP is essential to not impede business development and increase innovation. New ERP systems have improved functionality that simply didn’t exist 15 or even 10 years ago. These advances have been in step with the changing nature of technology and evolving consumer preferences. Increasingly, your customers are looking up product information on their phones and expect interactive information from your company through mobile. This kind of improvement not only lets you keep step with your fast-moving industry, but allows your company employees to work better together.

Enhance Performance

Since businesses rely on data, security must be of paramount importance, especially since outdated systems are more vulnerable to privacy breaches. Moving to the Cloud provides enhanced security that was not previously possible with legacy systems. This is increasingly important as your business data, including performance reports, detailed budget/forecasts, is contained in electronic format. Cloud ERP provides more consistent performance, without the annoyance of regular outages/ upgrades. Parts of massive IT costs are for simply maintaining an aging platform. Your IT budget is better spent empowering those people to use a modern system to support your company’s growth with streamlined and relevant data.

Easy to Use

Contrary to what one may think, the Cloud is very user-friendly and provides an extraordinary user experience that is intuitive and modern. Customers who choose to upgrade from legacy ERP systems often find that the adjustment is not as difficult as they once assumed. Business owners who are comfortable with an aging system may be surprised by how much easier and better using a Cloud provider can be. Cloud solutions combine the best of utility and ease of use
to help businesses expand enterprises. Cost efficiency, flexibility, and its ability to support business expansion make moving to the Cloud a strong choice for companies across industries.

Keeping Up To Date with New Technology

Upgrades are a necessity to keep up with today’s rapidly changing technology and provide optimal benefits to your business. Continuing to use your legacy ERP system may no longer be a beneficial or viable option and may just keep you working at current capacity rather than growing with your company. Often, legacy systems don’t grow because creators have moved on to more efficient ERP platforms. The longer a legacy ERP system stays outdated, the more business hardware maintenance costs it may incur. In addition, Regulatory Compliance rules have changed significantly in the past decade and organizations
must be nimble enough to produce accurate detailed reports without notice. Compliance includes in-depth financial reporting if your business plans to go public. Once a stock has been traded, reports will be necessary regularly. Moving to the Cloud allows you to easily stay up-to-date with and adapt to any new changes in the application or stay in compliance with regulatory rules and standards. This allows your employees to work freely, with the application’s best and newest capabilities, all without the worry of staying compliant with regulations.   Overall, upgrading to the Cloud provides a vast array of benefits to your organization, from business agility, greater scalability, 24/7 availability and access to data and greater efficiency. Improving your ERP and moving to the Cloud is more than reduced hardware and IT support costs; it also enables you to expand and relocate your brick and mortar business without having to move or acquire new ERP hardware and software, while providing security, file backup, and disaster recovery planning. The ERP Cloud service that you purchase can be changed in scale to accommodate growth and downsizing more easily than an in-house ERP configuration. The advantages of Cloud ERP are enough to make this an option worth considering.