Best 10 Reasons to Move Your On-Premises ERP to the Cloud
Firms traditionally rely on legacy, on-premises Enterprise Resource Planning (ERP) systems for information consolidation and organization. While initially, these solutions did improve corporate operations, there are several areas where they fell short, particularly in cost, agility, and maintenance.
Enterprise cloud software, such as cloud-based ERP systems, provides solutions to many problems that arise with on-premises ERP systems.
Making the switch to the Cloud
Business executives are converting rapidly to the Cloud on a global scale. Switching to a cloud-based system can help your business become more agile and growth-oriented, especially now that virtual offices and remote work are becoming more prevalent.
More companies recognize Cloud ERPs as the new normal. Cloud ERP systems are superior to their on-site counterparts in that they offer scalable, adaptable, and cost-effective technology.
Gains from Cloud Computing
Cloud computing has significantly changed how enterprise leadership views its IT resources. From a technological curiosity, the Cloud has developed into a vital part of modernizing the IT infrastructure and facilitating the digital transformation of big and small enterprises.
Let's look at cloud computing before delving deeper into cloud ERP systems.
Cloud computing and storage platforms offer many benefits over conventional on-premises systems, including lower operational costs and better compatibility with the working style of digital organizations.
Following are a few typical justifications for businesses using cloud computing services:
Lower Cost: Using the Cloud reduces the upfront expenses of hardware and software as well as the costs of building up and maintaining local data centers, which include the costs of server racks, round-the-clock electricity, and cooling, and IT professionals to operate the infrastructure. The cost of using cloud ERP is typically lower.
Greater Flexibility: One advantage of cloud computing services is the capacity to scale flexibly. The Cloud includes providing the proper amount of IT resources – such as adding or decreasing processing power, storage, and bandwidth – at the right time and from the appropriate location.
Improved Performance: The most well-known cloud computing services reside in a worldwide network of safe data centers routinely upgraded with the newest model of quick and effective computing gear. You may quickly get extra computing power if you need it for better performance by purchasing more cloud computing capacity. Consider the many benefits of a single corporate data center, including lower application network latency and more significant economies of scale.
Enhanced Security: Many cloud service providers supply a wide range of rules, technologies, and controls to help you strengthen your overall security posture and protect your infrastructure, apps, and data. Due to their limited financial resources, small businesses can notably benefit from this. Additionally, the company may operate securely without adding more employees for data security.
Greater Productivity: On-site data centers are for racking and stacking, which includes software patching, hardware configuration, and other time-consuming IT management duties. Many tasks are no longer required due to cloud computing, freeing IT staff to concentrate on more critical business objectives. Thus, the efficiency of the internal IT team may be used for other crucial duties, increasing employee productivity.
High Reliability: Cloud computing makes data backup, disaster recovery, and business continuity simpler and less expensive by replicating data to various locations on the cloud provider's network. Your data will be protected even if something goes wrong at one location - the IT team can restore it from another site.
On-premises vs. Cloud ERP
You can purchase mainframe computers and add them to your current infrastructure if you need extra processing power or bandwidth. The benefit is that you have total control over your data and are not required to pay outside vendors. Conversely, a cloud ERP solution allows users to access their ERP software through the internet. The ERP tools and software are distributed and maintained via the Cloud rather than being kept on-site.
10 Reasons Why All Sized Businesses Should Move from On-premises to the Cloud
Because Cloud ERP systems cut the cost of ownership, remove barriers to increased functionality, enhance corporate agility, improve data security, and reduce IT dependency, many businesses, especially small and medium-sized ones, benefit from them.
- Reduce IT spending
One of the most popular justifications for corporations using the Cloud is the ability to save money on IT infrastructure. Businesses can make changes on the fly, eliminate unnecessary assets, and easily right-size cloud-based resources depending on specific demands rather than estimating capacity requirements in advance.
Since no hardware is needed, cloud-based ERP systems are also less expensive to implement than on-premises ERP systems. Since most cloud-based ERP systems are available on a subscription basis and can be rapidly and painlessly adopted, it is a viable solution for small and medium-sized businesses.
- Enhance business agility
In today's global market, business flexibility is essential. Organizations must access flexible, on-demand IT resources to stay abreast of the competition and adapt to rapidly evolving industry dynamics. And more than 99 percent of what they need is on demand in the Cloud. Rather than waiting weeks or months for hardware and installation components, businesses may now lease capabilities straight from cloud providers, enabling them to launch products much more quickly.
- Strengthen Security
According to Statista Research Department, the global cost of cybercrime was estimated at some 8.4 trillion U.S. dollars in 2022. The company estimates that the cost of incidents caused by illegal activities on the internet is set to surpass the 11 trillion U.S. dollar mark in 2023. By 2026, annual cybercrime costs worldwide could exceed 20 trillion, an increase of almost 150 percent compared to 2022.
Undoubtedly, the growing frequency and severity of attacks in recent years have brought cybersecurity into sharper focus. No business can afford to let its guard down in this area since the results could be disastrous.
There is a widespread misconception that having an on-premises ERP provides greater security because it is "in-house." These days, data security is a top concern, and Cloud-based ERP suppliers offer built-in security measures to protect your information. But ignoring the value of cloud services could expose businesses to unnecessary security risks because they would need to rely on aging or poorly managed internal systems with more vulnerabilities than the public cloud equivalent.
Enterprise-grade security and compliance can be offered by cloud-based ERP vendors, much beyond what a firm can offer internally. Businesses can enhance their IT infrastructure and safeguard their programs from hacking attempts by migrating to the Cloud.
- Banish Worries About Hardware End of Life
End-of-life dates for critical hardware and software solutions can impact many choices. Effectively utilizing an on-premises ERP system necessitates extensive planning and calculations. Long-term contracts and restrictive license agreements further complicate the situation. Enterprises want to be free of such worries in the modern era, where startups can become unicorns in a year.
With a cloud ERP, businesses don't have to be concerned about contract terms or application life cycles because they can pay for critical functions and take advantage of upgrades as they become available.
- Boost Productivity
Thanks to a cloud ERP, businesses no longer need to manage their own on-premises data centers. Therefore, switching to a cloud-based ERP might significantly impact a company's IT department. Internal IT employees have little time to create and manage strategic IT architecture since on-premises ERPs require much maintenance. On the other side, operating an ERP from the Cloud typically requires less time and effort. The daily maintenance tasks the IT team must worry about will decrease as the software vendor assumes technical duties.
- Utilize Trouble-free Maintenance
Because the vendor hosts and maintains the system infrastructure, businesses don't have to worry about upgrading or maintaining their ERP software. To keep the program safe and in compliance with all relevant laws and regulations, the vendor maintains the database, servers, and other infrastructure and automatically sends new updates or patches to all clients. These providers take care of issues and frequently offer 24/7 assistance as a subscription-based service.
- Utilize modern technology
Utilizing new cloud-native technologies is made possible by moving to the Cloud in various ways. Cloud ERP offers a quicker and more economical way to apply them since AI, machine learning, complex analytics, and other business intelligence capabilities are built into the service. Without spending much money, these can assist businesses in improving operations, developing game-changing new services, and making more accurate estimates.
- Deploy in Less Time
Deployments in the Cloud are frequently quicker than those done on-premises. A Cloud ERP application of comparable complexity and breadth could take two weeks instead of an on-premises implementation, which may take three months. It reduces downtime when the transfer is finished and enables businesses to react rapidly to shifting market circumstances or meet rising demand. Additionally, it allows the company to concentrate on its core functions and delegate any early ERP-related worries to the cloud vendor.
- Utilize Simpler Customization
Many firms lack IT personnel with a background in creating enterprise resource solutions, making everything more challenging. Configuring an on-premises system to meet specific business objectives is more expensive. It demands a more significant time and resource commitment because the firm must do everything internally. Making the appropriate combination of third-party apps and ERP capabilities, as well as the required software and hardware improvements, are all part of this.
On the other side, because adaptations are carried out by the seller, customizing cloud ERP solutions is a quicker and less expensive process. No new hardware or software expenses exist, and no prior ERP experience is necessary. Companies can quickly and affordably create a solution that meets their unique demands.
- Make Collaboration Easier
One of the key advantages of switching to the Cloud is collaboration over the Cloud. It enables simultaneous collaboration among numerous personnel from various geographical locations.
Version control is a significant advantage of cloud collaboration. Users can collaborate on the same document simultaneously; all modifications are automatically saved and recorded. It results in fewer individual versions, leaving a permanent virtual trail behind.
And the Outcome?
With these benefits, moving ERP to the Cloud enables businesses to provide more value with fewer resources. However, customizing your journey to the Cloud to your company's unique demands, objectives, and technology strategy will make your move smooth. You set the tempo and prioritize the most critical facets of your business.
Choosing a supplier with a track record of managing cloud infrastructure contracts across various sectors and locations is best. A partner with many cloud users and solutions spanning all business activities is ideal in the ERP sector.
Ready to take your legacy, on-premises ERP to the Cloud? We're here to help.
About the author
Liberty Grove Software is an established Microsoft Partner that focuses on providing customers with sales, service, and support for Microsoft Dynamics 365 Business Central/NAV solutions and training and upgrades.
Over the course of more than 25 years, Liberty Grove has assisted hundreds of customers with businesses ranging from small to mid-sized to Microsoft Partners in implementing, training, customization, and upgrading Microsoft Dynamics ERP solutions.
The organization is one of only a few companies worldwide that Microsoft recognizes as qualified to provide Business Central/NAV Upgrade Service Centers.
