ERP Advisors Group: A Definitive Guide to Cloud ERP Deployment

Today, leaders see promotions everywhere to move their software to cloud solutions. Many are asking, "What is Cloud ERP?" It is a daunting task for leaders to deconstruct how the different cloud deployments will benefit or detract from their company’s cybersecurity plan, risk compliance, user convenience, uptime, IT infrastructure and maintenance, and overall connectivity. In this CPE Event, Shawn Windle will discuss the benefits and pitfalls of the various cloud deployments available in the market.

A Definitive Guide to Cloud ERP Deployment

With so many companies making the move from their on-premises ERP to cloud, executives are being met with obstacles in determining if that move is right for them. In addition, once the decision is made to make the move, how are they supposed to know which deployment model is best for their company? To tear down the barriers to ERP cloud solutions, follow this definitive guide to cloud ERP deployment.

Cloud ERP vs. On-Premises ERP

Cloud ERP is Enterprise Resource Planning that is accessible over the internet. These applications are hosted on a provider’s cloud computing platform, meaning it is typically delivered to clients “as a service”. On-premises ERP, however, is software purchased and owned by the company using it.

Customers implementing Cloud ERP do not own the software but instead lease or subscribe to the service on an annual or monthly subscription basis. This differs from on-premises ERP in that you are not responsible for upfront hardware costs when you acquire the software, the vendor does. The vendor for cloud ERP also takes care of the application maintenance, data storage, security needs, and mandatory upgrades. When implementing an on-premises solution, the company purchasing the software will be responsible for all infrastructure, database software, and administration and maintenance associated with the system, although it can allow for more control.

Benefits of Cloud ERP to an Organization

There are a number of reasons why Cloud ERP can benefit a business and be cause for a change. Due to it being subscription-based, upfront costs associated with cloud ERP tend to be lower than on-premises options, making it an ideal solution for many companies. It is also extremely flexible and allows for fast implementation since the client does not need to spend a couple of months setting up the hardware and software environment where the ERP will be installed.

Because the system is built within the cloud, this solution provides new functionality that was not previously available. This includes the ability to support your ERP through a mobile app to access business information anywhere, at any time. Access to an ever-expanding network of information through the internet also allows businesses to gather more data and better insights into their operations.

Like any ERP solution, when implemented and utilized correctly, Cloud ERP can enhance business operations through the automation of business processes.

How Does Cloud ERP Impact Different Aspects of an Organization?

It is the responsibility of company executives to have an understanding of how implementing a Cloud ERP will impact the business. Especially during times of change, employees and other parties involved will be looking to them for leadership and guidance.

Security

The level of security of your Cloud ERP system will depend greatly upon how it is deployed and who is ultimately going to be managing it. Each deployment type can vary in levels of security; however, it is more commonly found that when data is stolen, it was stored on the company’s premises and not in the cloud. The software vendors have commitments to protecting your data from security breaches, check this as a diligence point before you finalize your purchase. But the cybersecurity protection offered by a Cloud ERP will likely far exceed what your own company can provide.

From a data loss standpoint, Cloud ERP can be extremely helpful as the infrastructure providers have redundant sites which ensure the protection of your data and even the protection of your entire instance and unique implementation of the software. Cloud ERP providers should have disaster recovery plans that provide duplication of your implementation in a vastly different geographical location. This is far more beneficial than just having a backup of your data. Merely having a backup of data does will not be sufficient – you need a backup of your instance so you can roll over to the duplicated instance and immediately begin using your software without having to re-implement and load your backed-up data (which could take many months before you are operational again.).

Connectivity/Accessibility

Cloud ERP is unique as it allows users to access it from anywhere, making it much better at connecting employees, potentially at multiple locations. The cloud software infrastructure is built in such a way that it has an open environment, which substantially increases the accessibility options. Through increased accessibility, customers can experience greater usability inside and outside the enterprise.

Integration Platform

Many businesses require a system that can adapt with the business and run a number of different services to truly automate business processes. Within a Cloud ERP platform, easier integration with cloud services is attainable.

There are many cloud applications that can satisfy enterprise needs. Due to the connective nature, inside and outside the enterprise of ERP systems, the integration with other services becomes easier with the cloud.

Data Ownership

Organizations can be hesitant about the cloud because they fear storing their information outside of their enterprise. Fortunately, the customer always owns their data and can download it at any time, if they know how. However, should the customer fail to pay their cloud subscription bill, the vendor could turn off their software access and prevent getting data access until the subscription fees are caught up.

Customization

Due to its high elasticity, Cloud ERP allows for enterprises to easily scale up or down depending upon the business's needs at the time. The customizability of Cloud ERP gives leaders the ability to manage the business more efficiently, giving the enterprise a chance to focus on other concerns related to their core activities.

Adversely, Cloud ERP may have some limitations on customizations as compared to on-premise solutions.

Types of Cloud ERP Deployments

The method of Cloud ERP deployment determines a lot about the Cloud ERP system. Differences are clear in security, upkeep, and ownership.

Hosted

In a hosted Cloud ERP deployment, the user owns the software but does not own the hardware investment to “host” the system. The software is typically being run through a Terminal Server that is accessed through a Remote Desktop. That server is held at a site by the software vendor.

An advantage to this model is that it can reduce your workstation costs since the software is not actually running on your company’s local desktop. If cloud ERP is not for your company, users can also choose an on-premises deployment with the Terminal Server. Another advantage is that the hosted providers can ensure that your data is secure and is available from more than one hosting facility in case of disaster. This is due to duplication of your instance which mitigates the loss of your ERP and data due to a disaster.

Private Cloud

A private Cloud ERP deployment provides a one-on-one environment for a single customer. In this model, the customer does not share the vendor’s hardware with any other customers. The greatest distinction between private and public cloud is how the hardware is handled.

A private cloud model allows for users to access systems and services within a given border or organization. Due to this, private cloud provides greater control to the users that also typically supports legacy systems and customization. Since the system belongs only to the user, this model facilitates greater protection over data and privacy. A disadvantage, however, is the maintenance required for upkeep and upgrades on the ERP, as through this model, the user will need to have a team to do this themselves. In this case, responsibility does not fall on the vendor.

Public Cloud

Through public Cloud ERP deployment, cloud infrastructure services are provided over the internet to the general public or industry groups. As mentioned above, public cloud differs from private cloud since public cloud deployment users share the hardware of the system with other users. This model makes it possible for anyone to access systems and services. The system is owned by the entity that delivers the cloud services and not by the customer.

This can be an ideal choice for many businesses due to a smaller upfront investment. The vendor provides the servers and server software, and the infrastructure management. This means there are no annual maintenance fees for the customer. In addition, customers can leverage the vendor’s scalability to expand their infrastructure or computing power with little delay in setup time.

Single Tenant

In a single-tenant environment, all customer data and interactions are separate from each customer. This means that customer data is not housed in the same database, thus there is no mixing of a different company's data within the same database.

There are many advantages to this form of deployment that allows for greater separation of data. The first is data security. Since the data is isolated, the risk is minimized that there will be data disruptions or breaks that will affect multiple customers. Users also find that they have more customization options compared to multi-tenant deployment because each customer has dedicated software and hardware for their instance. Finally, portability may be easier under this deployment because it can be easier to migrate data from a single-tenant architecture since there is simply less to handle.

Alternatively, single-tenant deployment has disadvantages that turn many businesses away. Under this model, complexity in setup and management is heightened. The vendor establishes and maintains a separate database for each customer. As a result, this can also be an expensive option, since the vendor expends resources for each tenant rather than serving multiple tenants stored in one database.

Multi-Tenant

Multi-tenant deployment is a model where customers cannot see each other’s data, but their data live in the same database. Because of this, the same computer is used to process all the data, making it unsegmented in any way.

As with any deployment model, there are benefits to going in this direction with your system. This deployment provides easy deploy-ability, which is at the heart of effective SaaS operations because it makes it easy to build and deploy applications faster while also scaling those applications quickly. Multi-tenant allows for efficient resource usage because it is shared by multiple users. Finally, the costs are reduced due to the sharing of the environment; therefore, it is less expensive to build and maintain.

Users must also understand the risks of this deployment as it impacts the business. This model could be a security risk to the business because the information is not isolated to a single client. However, many public companies and some of the most prominent companies in the world rely on multi-tenant SaaS software, so the model is well-proven.

Summary

Cloud ERP has many layers, making it difficult to obtain a full grasp of the topic without help from the experts or conducting significant research. Some deployments allow for greater flexibility while others are better suited for security needs, so make sure you have a clear set of guidelines before making a decision. Remember, it is always important to reach out for help when you are in an area of uncertainty to ensure your project is a success!