Some predictions suggested cloud ERP would only arrive in 2020 or even as late as 2025. But it’s already here and this rapid progress may have caught some vendors napping, particularly in the small-to-medium business (SMB) category, and they may have to surrender to their very own Kodak moment.
By Gerrit Olivier, CEO of About IT
SMBs must be wary that they back a winning horse. They need true cloud ERP with all the benefits it confers rather than fake cloud ERP that’s a stop-gap solution from laggard vendors and that may cause them headaches down the road.
But how do you spot the real cloud ERP from the fake?
Fake cloud ERP is just legacy ERP with a thin veneer of new icons but which is hosted on a file server either on-premise or on a file server but served up via the cloud. It’s ERP that’s been jury rigged to run in the cloud but it’s not a cloud-native solution.
It puts SMBs at a disadvantage because it presents certain limitations, such as not being able to install it on mobile devices nor being able to access it from mobile devices, it uses too much bandwidth, making it slow, unresponsive and more expensive to operate. There are others.
How to spot fake cloud ERP
You can spot fake cloud solutions by their installation process, which is the same as the legacy stuff. You don’t have to install cloud-native solutions, which you simply run through a browser. Fake cloud ERP also offers the exact same functionality as pre-cloud versions of the software, and doesn’t need to convert any data, which means it’s running on the exact same database architecture. It also uses third-party software to access the system, such as Remote Desktop from Microsoft. Finally, it’s an expensive, difficult and time-consuming process to get these systems to talk to any others you may have particularly if those systems are already cloud native themselves.
True cloud ERP solutions are built form the ground up to work in the cloud. They’re native to the cloud environment which means you access them through any browser. That could be Chrome, Internet Explorer or Safari from a desktop or laptop or even an app from a mobile device (which, simplified, uses browser technology). The ERP system is served up from the cloud, be that an on-premise cloud or an offsite, third-party cloud. It’s written in a modern programming language, like C#, Visio, or html using commonly available tools and applying common, modern standards.
Cloud ERP useful to SMBs
Cloud ERP offers SMBs the benefits of the software-as-a-service (SaaS) model, among others being a low monthly fee rather than a huge, upfront capital outlay with a raft of hidden ongoing overheads. All SMBs need is a device capable of running a browser and an Internet connection, which also limits their IT complexities.
With that SMBs get all the benefits that were traditionally the exclusive realm of big businesses in the past. Access, including mobile access, to the data in the ERP system for a wide range of tasks. Manage inventories, relevant HR records, customer systems, get the reports and insights and the whole gamut of activities that powerful, modern ERP systems enable.
With cloud ERP, unlike legacy ERP, it’s also easier to change the system to suit a company’s needs as the business evolves over time. The systems readily scale so even adding or cutting functionality becomes a matter of provisioning infrastructure through the service provider’s website. There are other advantages too, such as backups and recoveries in the event of disaster or failure, as well as security coupled to the cloud service provider’s solution.
SMBs stand to gain the numerous benefits of ERP when they bring cloud-native solutions into their operations. But they risk exposing their businesses if they inadvertently get the wrong thing.