SEVEN REASONS TO CONSIDER ERP IN THE CLOUD SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND

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1 SEVEN REASONS TO CONSIDER ERP IN THE CLOUD SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND

2 CONTENTS INTRODUCTION 3 TRY BEFORE YOU BUY 4 TAKE ADVANTAGE OF THE MOST ADVANCED TECHNOLOGY 6 GENERATE MEASURABLE COST SAVINGS 8 RUN A MORE EFFECTIVE AND SCALABLE IT OPERATION 10 STRENGTHEN THE INTEGRITY AND SECURITY OF YOUR ERP SOLUTION 12 ENABLE GLOBAL USER PRODUCTIVITY ON ANY DEVICE 14 ACCELERATE YOUR IMPLEMENTATION 16 YOUR BEST-PRACTICE CHECK LIST 18 CONCLUSION 20 ABOUT COLUMBUS 22 Columbus RapidValue 22 Columbus Care 23

3 SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND Introduction Business decision makers who are choosing an ERP system also have to decide whether to run their new business management solution on-premise or in the cloud. Many cloud-based ERP offerings are available today, including public, private, hybrid, and hosted solutions. What these deployment models have in common is that the ERP solution resides in a technology provider s data center, away from the customer s business location. Technology users access the system through the internet. Most cloud service providers manage solution upgrades and data protection for their clients. In recent years, the adoption of cloud technology has accelerated. We expect this trend to continue in 2014 and beyond. More companies than ever decide to base their new ERP deployments in the cloud or to migrate their existing solutions to it. The market for cloud-based ERP deployments and other cloud technology services will continue to grow. How can your company take advantage of it? What are the real benefits of implementing ERP in the cloud? At Columbus, we help companies in many industries deploy their ERP systems. We also assist them in making the business case for the best implementation model. Read about some reasons why some companies deploy business-critical technology in the cloud. We hope that our experience can help you arrive at a deployment strategy that is efficient, reliable, and economical, and that can meet your company s changing needs. 3

4 KEY BENEFITS Try Before You Buy! Thoroughly evaluate and test-drive an ERP solution before you commit to it Find additional information here: Gain the approval and buy-in of concerned stakeholders When businesses make large investments, they run the risk of making a wrong decision The ability to try a new technology before committing to it greatly reduces this risk When you consider a cloud-based solution, you can safely evaluate it before you make an acquisition or sign a long-term service contract For a limited time, maybe even for a specific business group or organization, you can have your ERP solution set up in the cloud so you can test it thoroughly The technology partner and hosting service provider you engage with will be able to work with you to establish the most meaningful and practical parameters for a pilot project In this way, you can see how the capabilities of the solution meet your business needs You also can verify what the accessibility of the solution is from a variety of locations and mobile devices You experience firsthand how well the solution responds in a realistic working 4

5 SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND environment. Your ERP users participating in the test can provide feedback from their perspective regarding solution features and the practicality of the cloud implementation. When you make your final decision, you can do so with the assurance and comfort resulting from hands-on exposure and comprehensive experimentation with the cloud-based ERP solution. Some other technologies, such as customer relationship management (CRM) systems, are ahead of ERP in terms of cloud deployment. Today, most companies still run their ERP solutions on-premise. As ERP in 2014 and following years moves into the cloud more and more, the ability to experience the solutions before purchasing them will help rule out doubts and uncertainties for those decision-makers for whom the cloud is a new and unknown territory. 5

6 Take Advantage of the Most Advanced Technology Cloud technology enables you to run your new ERP solution in an enterprise-class, fit-for-purpose environment. Good cloud providers invest in the latest, high-specification technology to enable your business application to run at the greatest speed, with fast, reliable access from around the globe. The cost of replicating this environment in your own operation would include significant upfront capital and resource commitments, plus the costs and effort of staying up-to-date with evolving technology, ongoing maintenance of upgrades, and support for changing usage scenarios. Many organizations that have been running an on-premise ERP solution may have saved cost through inertia. Having stopped considering ERP as a strategic technology that plays a role in moving the business forward, they no longer invest in their solution KEY BENEFITS Take advantage of best available technology to elevate the strategic value of ERP. Keep your ERP system current without the costs and headaches of managing updates. and the technology that surrounds it. Often, they are behind in terms of upgrades to newer versions or capability enhancements. This approach may have some relatively minor, short-term cost benefits, but it may have damaged the competitiveness of the business. The costs of any future upgrades will be significantly higher, and those updates will also require more adjustments in the software products that integrate and interact with the ERP system. When you move ERP into the cloud, you do not need to ever worry about these issues. Through your cloud service provider, you can stay current with the latest technologies, including software and hardware upgrades. You can take advantage of all the business benefits of ERP at a controlled cost, usually a fixed monthly fee.! Find additional information here: 6

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8 Generate Measurable Cost Savings KEY BENEFITS When you make the business case for ERP in the cloud, you can score a strong point with this key benefit, especially when you need to convince the CFO: On average, the costs of cloud computing are far less than those of on-premise solutions. In traditional, onsite deployments, your company incurs the significant upfront costs of software licenses and new or updated servers and network equipment. When you deploy in the cloud, you do not face those expenses. Cloud ERP solutions are usually billed per month and per user. You can fully finance your new solution through operational costs rather than by means of upfront capital expenditures. This cost model also helps to keep your IT budget predictable and controlled over the timeframe of the cloud-service agreement. Pay for the ERP capabilities you need, when you need them. Eliminate upfront software licensing and hardware investments. Reduce the costs and resource impact of IT support, maintenance, and ERP management.! Find additional information here: 8

9 SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND Let s summarize the one-time and ongoing costs savings associated with cloud computing: Obviously, you don t pay software license fees. You also do not need to purchase new servers or network infrastructure. The physical footprint of your operation is insignificant there is no need for rack or data center space. Cooling and power consumption costs are less because you do not need IT hardware such as server racks. The high flexibility of cloud services means you only pay for actual users and applications. When business requirements change, you can adjust the number of users or the ERP modules and applications they work with. You may be able to generate additional savings in operational costs because cloud-based ERP requires less support and maintenance from IT, so you can reassign IT staff to more business-critical tasks. 9

10 Run a More Effective and Scalable IT Operation Because your hosting partner assumes most of the day-to-day tasks of running your solution in the cloud, you can offload many tasks from your IT department. The IT team no longer needs to perform a multitude of jobs that range from changing backup tapes to implementing patches to rolling out software updates. Your cloud partner will also monitor several performance indicators to ensure that your ERP system runs at an optimal level. Taking these time-consuming tasks away from your IT department enables it to focus on the more strategic aspects of technology operation where it can drive real business benefits. KEY BENEFITS Outsource busywork and use your IT group for more valuable tasks. Access ERP and technology expertise as the business requires it.! Find additional information here: 10

11 SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND At the same time, you can extend your company s IT resources by accessing your cloud service provider s capabilities for certain tasks and functions. Your provider s staff should include highly qualified IT experts who can work effectively with a number of the company s customers. These professionals would have deep knowledge of applications and environments that it would not be cost- or resource-effective for you to support and staff. In engaging with your cloud service provider, you can pay for the specific skills that you need, when you want them. At the same time that you gain access to advanced technical expertise and skills, you can ease the task load and reduce the resource impact on your internal IT staff. 11

12 Strengthen the Integrity and Security of Your ERP Solution KEY BENEFITS Many business leaders experience a level of discomfort with moving ERP solutions to the cloud. They fear that one of their most valuable assets, business data, may become compromised and accessible to unauthorized persons through the web. They are also often concerned about connectivity, wondering about the consequences if the company cannot access the solution because of internet connectivity problems. Draw on your cloud provider s expertise and infrastructure to enhance your business viability. Benefit from unprecedentedly high integrity and availability of your data, ERP system, and applications. We have good news. The security, availability, and integrity of cloud-based ERP and other applications has made huge advances in recent times, and we can expect even more improvements in this area as technology providers refine their offerings in Reputable cloud providers will generally have far greater security expertise than you can afford to maintain in-house. They understand companies security concerns and have the insight and resources to address them. Business continuity, data protection, and disaster recovery are at the core of cloud! Find additional information here: 12

13 SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND providers business model. They can work with you to make recommendations and strategize the best way to protect your data against any security threat or viability challenge. They will be able to reduce your risk exposure from software-related liabilities such as viruses, phishing, or unauthorized access by using such tools as automated security packet sniffers or sophisticated firewalls. In addition, they also can safeguard the physical environment of your data and applications by using biometric control systems, CCTV cameras, and many other resources and technologies. Our experience and industry statistics show that the availability of ERP systems in the cloud is strongly increased compared to that of on-premise solutions. Stringent industry standards continue to improve the reliability and availability of cloud-based technology. A credible, capable cloud service provider will be able to guarantee you an extremely high percentage of solution uptime, so you can do business without interruption. 13

14 Enable Global User Productivity Taking your ERP solution to the cloud can help you transcend some of the limitations and challenges that can accompany on-premise implementations. When you run operations in several sites and want to deploy an ERP system for the entire company, the complexity of on-premise implementation increases significantly. You need to ensure that employees at all sites can easily access the solution and work effectively with it, so the IT department or hired consultants need to create and maintain a reliable, fast communications infrastructure. Your company thereby incurs increased costs and resource overhead. As the business grows and changes, you will also need to plan to scale the communication technology the ERP system requires.! Find additional information here: KEY BENEFITS Provide an excellent user experience with consistent ERP performance. Enable ERP users to be productive at any location, using any connected device. Benefit from superior communications technologies without acquiring them at great cost. 14

15 SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND When you deploy your ERP solution in the cloud, these concerns fall aside. All of your ERP users can access the system through the internet, from any location in the world. That ability, in turn, can greatly help user adoption of the solution. Your cloud service provider already owns all the infrastructural resources needed to make sure the ERP system runs at optimal levels of performance and reliability. There are other advantages when you take ERP to the cloud, depending on the capabilities of your specific ERP solution. Your employees can use their preferred, internet-connected hardware when they access the ERP system desktop computers, laptops, tablets, and other mobile devices. What s more, cloud technology makes it very easy to connect the ERP system with the collaboration and social-media tools your company uses, resulting in potential increases in employee productivity. 15

16 KEY BENEFITS Make your ERP implementation rapid and predictable Easily connect other business groups, subsidiaries, and locations to the ERP system Accelerate Your Implementation Any ERP implementation, no matter whether it is on-premise or in the cloud, is going to take time and needs very careful planning and project management Where the cloud can help is with the IT infrastructure Because there are no additional hardware requirements, you can save time that you would otherwise spend by procuring and installing servers and network equipment, and by managing any associated issues These implementation benefits may well compound if your roll-out involves multiple regions, subsidiaries, and locations Once your system is up and running, you will again benefit from largely care-free, fast upgrades and the ability to easily add more users as the business grows You might also want to be aware of the different cloud deployment models most commonly practiced! Find additional information here: 16

17 SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND Depending on your business model and requirements, each of them has its advantages in making your implementation fast and painless. Your technology partner can help you make a wise choice among these options: Software-as-a-Service (SaaS): Multiple organizations share hardware resources. Customers typically enter into a rental or subscription agreement, and may rely on shared or separate instances of their software applications. Most of the businesses using this cloud deployment model are smaller companies. Hosted ERP: Customers run their cloud ERP solutions on dedicated server and network hardware and typically use separate instances of their applications. Many larger businesses prefer this model. Hybrid ERP: Businesses maintain on-premise software and integrate it with a number of cloud-based services. Hybrid ERP provides a level of flexibility and control that some companies find valuable. In this type of deployment, they can easily migrate from one solution delivery model to the other as their business needs require, without losing data or functionality. 17

18 Your Best-Practice Check List: Before committing to a purchase, perform a cloud-based ERP pilot project. Involve key business stakeholders and influential users in the cloud pilot. Take the cloud vs. on-premise decision as an opportunity to lift the strategic value of ERP. Review your cloud provider s service commitments for software and hardware enhancements. In comparing on-premise to cloud-based ERP, consider all one-time and ongoing costs and savings. Project costs and savings through the contract term with your cloud service provider. Assess the impact of cloud ERP on the productivity and resource-efficiency of your IT team. Verify which IT skills and expertise you can access through your cloud service provider. Review your cloud service provider s uptime service-level commitment. Check on applicable ratings and certifications for your service provider and data center. If you can, arrange for a data center tour for yourself and concerned business stakeholders. Include multisite and global growth considerations in your implementation planning. Take advantage of cloud-enabled mobile ERP capabilities. Work with your partner to determine the best cloud deployment model for your business. Learn from the cloud experience of your peers in other organizations.! Find additional information here: 18

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20 Conclusion In 2014, many enterprises and smaller businesses will move their ERP systems and other business-critical applications into the cloud. ERP implementation in the cloud may not be the best option for all companies, but it is definitely worth your consideration. If you are newly implementing an ERP solution, we recommend that you review cloud deployment options and evaluate whether the cloud is a good fit, given your organization s business model and expectations for growth. If you already run your ERP system on-premise, it s worth thinking about the possible savings, efficiencies, and flexibility you might achieve as you offload most of the ERP administration to a trusted provider. Your technology partner can help you determine whether a cloud deployment makes good sense for your business, help you assess any financial and operational advantages, and plan for the implementation that best fits your business. You may also find the other papers in our ERP in 2014 and Beyond series helpful: Seven Ways To Avoid ERP Implementation Failure Seven Ways That Business Process Management Can Improve Your ERP Implementation Seven Ways To Optimize Your Existing ERP Solution Seven Ways To Help Data Migration During Implementation! Find additional information here: 20

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22 About Columbus Columbus is an industry-based consultancy and award-winning technology developer focused on the manufacturing, food processing, and retail industries. We are the preferred consultancy for ambitious companies wanting to streamline business processes, improve operational efficiencies, reduce costs, and improve visibility into their businesses. Our approach to solving our clients issues can best be described as proactive. We challenge our clients traditional ways of thinking, help them see new opportunities for improvements, and take responsibility to drive change in their organizations. We ve delivered these business benefits for over 25 years to many of the leading companies worldwide. Columbus RapidValue Columbus is a long-time developer of award-winning industry software and has recently become well known for developing Columbus RapidValue. RapidValue is a business process management tool that drives increased client value for ERP solutions. It delivers a shorter implementation with more predictable results by incorporating hundreds of best industry practices accumulated through in over 6,000 Columbus implementations. This allows Columbus to focus on streamlining the processes that make our clients unique. Companies all over the world are investing in RapidValue and enjoy the benefits of shorter times to value, quicker and less risky implementations, and the industry leadership and knowledge acquired from the thousands of Columbus deployments that preceded theirs.! Find additional information here: 22

23 SPECIAL REPORT SERIES ERP IN 2014 AND BEYOND ColumbusCare ColumbusCare is unique to Columbus it is how we take care of our clients, 24/7 worldwide. With ColumbusCare, you get a well-trained team dedicated to improve your system s efficiency, cost-effectiveness and risk resistance. Whether you re looking for enterprise-level support, upgrade options, or system enhancements, ColumbusCare provides flexible service levels to meet the needs of your business. 23

24 SPECIAL REPORT SERIES: ERP IN 2014 AND BEYOND Seven Ways To Avoid ERP Implementation Failure Seven Reasons To Consider ERP In The Cloud Seven Ways To Help Data Migration During Implementation Seven Ways To Optimize Your Existing ERP Solution Seven Ways That Business Process Management Can Improve Your ERP Implementation Columbus is a part of the registered trademark Columbus IT

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