Cloud ERP software is not necessarily easier to implement or easier to use than on-premise systems but one thing is certain: when implemented properly, cloud ERP software can save organizations money in many cases. Cost savings in the form of reduced IT staffing and reduced hardware expenditures are just two of the benefits organizations point to as reasons for choosing cloud ERP.
Before your organization decides to transition to the cloud, however, it is wise to consider the amount of effort involved in implementation because, friends, our research has shown cloud ERP implementations are no less strenuous than traditional ERP implementations. All the typical issues (e.g., organizational change management, adoption and usage of new business processes, and so forth) raise their ugly heads no matter what ERP deployment model is chosen.
Whether you are implementing on-premise or cloud-hosted ERP software, operational improvement is achieved only through executive commitment, proper resource allocation and guidance from an experienced implementation partner. To realize cost savings from cloud ERP, organizations should also budget for all essential components, including everything from organizational change management to business process reengineering.
Following are five tips for maximizing cost savings from cloud ERP software:
- Know your requirements – Business process mapping and requirements gathering should be completed before implementation so that your organization can select the ERP software that is the best fit for your business.
- Understand the costs – When evaluating ERP vendors, organizations should consider the total cost of ownership and not just upfront costs.
- Evaluate public v. private clouds – While the private cloud offers more security, the public cloud can be cheaper because you only pay for the amount you use. Some vendors offer both options.
- Hire the right people – Cloud ERP software requires an IT staff with a unique skill set. An understanding of coding, testing and multi-tenant cloud computing is essential.
- Develop a business continuity plan – Organizations should plan for a range of scenarios that can jeopardize their business. When it comes to cloud ERP, these scenarios include everything from catastrophic power failure to your vendor packing up shop and going out of business.
If your organization follows all of the above tips, it will not only save money on upfront infrastructure costs but it will likely realize cost savings in IT staffing, licensing fees and annual maintenance. A sloppy implementation with minimal user acceptance, however, will only erase these cost savings – last minute end-user training and project recovery fees are likely to cost more than was saved. These fees only escalate the longer you wait so plan to engage in organization change management and business process reengineering early in the project.
To learn more, download our free white paper, A Comparison of Five Leading SaaS and Cloud Vendors. Also, be sure to vote in our recent poll about cloud ERP software.