My previous article covered the pros and cons of traditional versus Cloud-based ERP. Enterprise resourcing planning software has lagged behind cloud computing solutions in other business areas like CRM and storage.
Readers responded by asking for tips on how to choose a vendor and implement a Cloud ERP. It is fairly Cloud ERP will grow in the next few years because large vendors like Microsoft, Oracle, and SAP are ramping up product offerings. Research firm Gartner predicted:
“By 2018, at least 30 percent of service-centric companies will move the majority of their ERP applications to the cloud.”
1. Know your requirements
You need to understand why your company wants to pursue an ERP solution. This includes creating a roadmap by assessing your business goals, resources and needs. This means documenting important business processes and your company’s key performance indicators (KPIs). For example, does your organization need to make better decisions with information? Is getting cost control more important? Or is the goal higher productivity and greater operational efficiency? By understanding your needs for an ERP solution, it is easier to evaluate ERP vendors and perform a successful implementation.
2. Understand various ERP cloud deployment options
Public cloud has a lower cost and is less flexible. It is useful for standardized workloads, many users, collaborative processes and reducing or increasing capacity to meet demand. While you pay for what you use with public cloud, there is less control and customization. Public cloud costs more and offers more control. It supports scalability and self-service but the software is maintained through a proprietary architecture. The main difference is that a private cloud is dedicated to one organization and offers more security, control and customization.
A hybrid cloud option uses both private and public clouds to perform distinct functions within the organization. Some resources are run in the public cloud while others exist in a private cloud. This option boosts flexibility but also add complexity for integration and management.
3. Reallocate internal teams and resources effectively
When an ERP system is implemented, it affects the entire business cycle. Consequently, the internal team may discover that certain skills for one task are needed less often while skills for another task will increase. More often than not, internal IT staff may need to reallocate resources and skills after a cloud ERP implementation.
“We didn’t have to hire new people; we could work with the IT people that we had, and leverage their expertise into the business. That was a tremendous success for us; it created a lot of empowerment of our IT people.”
It is important that IT staff be open to reorganizing tasks and learning new skills, as the situation requires it.
4. Get buy-in from executive management and key stakeholders
When the entire business cycle is affected in an organization, change is inevitable. It is important to receive buy-in and support from executive before, during and after an ERP implementation. This should involved the CEO, CFO and other important roles during the vendor selection and decision making process. For a successful initiative, it necessary to have at least one executive inside the organization becomes its champion.
CIO, Callegari is quoted in an article saying:
“It’s so easy to say, “The project is implemented, and I’m done.” Wrong. You’re done when the system is adopted; when the users have gone through the process. Your IT team must say: “I need users to really utilize the system in a way that is practical to them.””
5. Under total cost of ownership
An ERP implementation may incur higher upfront costs because of custom customer requirements. A project team and project manager should maintain strict control of budget and timeline. Additionally, the cost of the implementation should be based on the total of ownership over the life of a contract. Regardless of the type of cloud solution chosen, ERP vendors should be evaluated using the same set of criteria for the duration of the contract.
6 Do dry runs before going ‘live’
After the system has been configured and ready, do some dry runs with a small selection of employees before going live. Ensure they are trained and prepared to use the new system. Each dry run should expand and engage more users. This creates more confidence from all stakeholders, especially employees. It also helps refine and improve a clear and well-defined implementation plan.
Succeeding in any cloud ERP initiative is challenging. It required top-down support from your organization’s leadership, careful selection of a vendor based on your needs and progressive management at all stages of the implementation.