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2 Contents About These Guides... 1 About The Author... 1 Where Businesses are at with Cloud Adoption... 2 The Cloud Continuous or Discontinuous?... 5 Crossing the Chasm... 8 The Early Adopters (10% of population)... 9 The Pragmatists (40%)... 9 The Conservative Buyer (40%) The Laggards (10%) Infrastructure Security What is meant by a True Cloud software product? What are the commercial benefits of Cloud vs. On Premise? Summary... 23

3 Page 1 of 27 About These Guides

4 Should my Business be in the Cloud? Page 1 of 27 Cut to the chase is a saying that means to get to the point without wasting time. The phrase originated from early silent comedy films, which invariably climaxed in funny chase scenes. Some inexperienced screenwriters or directors would pad the film with unnecessary dialog, which bored the audience and prolonged the time before the chase. Whilst not climaxing in hilarity, these guides are intended to provide a clear and succinct guide to specific software and IT topics and cut to how they relate to business. The target reader is a business owner or leader who feels the need for more information and some guidance on the topic without waffle or unnecessarily detailed technical content. About The Author I have been in the business software world for over 30 years with the majority of that time within software houses. I have held many positions, from programmer to CEO, in both UK and Global roles. I am currently working as Sales Director for Metaphorix, a Microsoft Dynamics Partner based in the West Midlands.

5 Should my Business be in the Cloud? Page 2 of 27 Where Businesses are at with Cloud Adoption

6 Should my Business be in the Cloud? Page 3 of 27 There is a huge amount of published content and interest in how we can take advantage of the Cloud. The majority of us now use smart phones and tablets to organise our life outside out of work via , messaging, calendars and a whole plethora of apps. From a business perspective many of you will be accessing work and calendars via mobile devices. Some of you may even be using apps to connect to your business systems or data. Less riskaverse businesses have moved their backups and even their systems into the Cloud and. But how many businesses today have actually moved their core business software and deployed it in the Cloud? Let s turn to Gartner Group who are arguably the world s leading IT research company for answers. They published a paper on Cloud ERP adoption in January 2014 with the following graphic being the summary.

7 Should my Business be in the Cloud? Page 4 of 27 What immediately strikes you is the very low percentage who have already moved their core ERP software into the Cloud. Gartner s view is that for now the Cloud is seen by business leaders as fine for personal use and even for company systems and maybe a non-critical software application but not for their core line of business software and data. So, why is this? We will attempt to shed some light on the reasons for this within this guide. Before moving on though it s also very relevant to highlight that by % of businesses that participated in the Gartner survey believed their ERP system would be in the Cloud. If this happens then Cloud ERP will have truly arrived as a product for the pragmatic buyer, but first it needs to cross the chasm

8 Should my Business be in the Cloud? Page 5 of 27 The Cloud Continuous or Discontinuous?

9 Should my Business be in the Cloud? Page 6 of 27 Business software products date back to as early as the 1970 s with the release of ledger systems on huge mainframe computers through to stock control systems and MRP packages running on mini computers in the 1980 s and onto MRP2 and what we now know as ERP accompanied with the likes of CRM, BI and WMS. However they have always resided on a server that was itself nearly always located on the business premises. This quickly became accepted as the norm the Main Street of how to buy and deploy business software. In recent years many of us consumers have accepted the Cloud platform as perfectly acceptable for backing up our smart phones or as a repository for our personal s, photos and . Many of us use the Cloud and the apps that reside on it to organise our personal lives and to provide us with entertainment. This has been a continuous evolution from the introduction of texting on mobile phones (remember the trusty Nokia 32.10) to the screen displays of the Blackberry and early iphones and onto the evolution of apps and the use of Cloud as a backup storage device. Since this has been an evolution for us as consumers many of us have happily followed this path with glee (or at least to keep up!) However, we see a much slower adoption of this new concept extending the use of the Cloud to be the platform of choice for our business critical software apps and data. This is perceived to be a

10 Should my Business be in the Cloud? Page 7 of 27 much greater step, the introduction of a new platform for our business to run on which many people see as discontinuous a huge leap of faith needed to adopt it. What is driving this behaviour?

11 Should my Business be in the Cloud? Page 8 of 27 Crossing the Chasm

12 Should my Business be in the Cloud? Page 9 of 27 Businesses are collections of people with the culture of them often set by their leaders and history. This leads to different buying patterns, particularly when there is a discontinuous product on offer. To understand more it s worth tapping into the thinking of The Chasm Group, a world leading disruptive consulting business who specialise in technology adoption. They categorise businesses into four different types of buyer. Use this to think where you and your company fits The Early Adopters (10% of population) This population will always want to be the first to have their hands on the latest technology will take risks and implement it before anyone else at all costs to give them competitive edge. The Pragmatists (40%) These buyers will only buy when they can take references from people and companies that they trust who have bought the

13 Should my Business be in the Cloud? Page 10 of 27 product, in this case businesses that have moved their core business software into the Cloud. The Conservative Buyer (40%) They only buy when they perceive that their business will be at a disadvantage compared to their main competitors and will hold off until then. The Laggards (10%) These people and businesses are probably running their core business on software that is over 20 years old and no longer supported! Their attitude is if it s not broken then don t fix it. So what is The Chasm and how does it relate to Cloud business software?

14 Should my Business be in the Cloud? Page 11 of 27 Because pragmatic buyers don t trust the judgment of early adopters there are no reference customers for them and so there is a chasm to cross for businesses introducing new disruptive products like business software in the Cloud. Given the Gartner statistics ERP in the Cloud sits very firmly today to the left hand side of the Chasm, so will it cross the Chasm? Many technology products have fallen into the Chasm think of Betamax video technology or IBM s OS/2 desktop software both of which

15 Should my Business be in the Cloud? Page 12 of 27 were technologically superior to their competitive products that did cross the Chasm (VHS and Windows.) Well, the consensus appears to be that core business applications in the Cloud will indeed cross the Chasm and become mainstream and this reflects in Gartner s predictions. Given we have adopted Cloud in our personal lives as the platform for our smart phone usage, entertainment, personal and finances it doesn t seem such a Chasm to cross in adopting it within our business lives. The Chasm Theory also encourages focusing on a Bowling Alley approach to cross the Chasm whereby a particular target market is identified for the new technology product and individual bowling pins with the head pin being the initial focus represents the market segments. In practice the bowling alley for Cloud software is probably characterised by leading pins of backups, corporate and peripheral applications such as Time & Expense Management and Mobile Apps such as remote order taking or indeed targeting small business units to move fully Cloud within a particular business. This bowling alley approach of moving from On Premise through to a hybrid of On Premise and Cloud through to all systems in the Cloud is how the market will continue to develop.

16 Should my Business be in the Cloud? Page 13 of 27 Time will tell, but your business needs to consider this today as part of its IT strategy and how it fits with your culture, attitude to risk and competitive landscape.

17 Should my Business be in the Cloud? Page 14 of 27 Infrastructure

18 Should my Business be in the Cloud? Page 15 of 27 Moving on to a more practical consideration what do you need to investigate to establish how viable it is to move your business fully into the Cloud? This is particularly relevant to the UK where our Broadband coverage, speed and reliability have been an issue to date. You should audit all of your business locations, remembering to include any customers, home based employees, sub-contractors or suppliers who have remote access to your systems. Consult your software suppliers who will be providing your systems in the Cloud to establish their recommended line speeds for their products. In terms of reliability and resilience the weakest link in your Cloud infrastructure will be the last mile of connection to each of your sites. This may well be a single line and so your business will be wholly dependent on this remaining intact many a connection has been lost to utility, groundwork or road maintenance workers digging through the line! It is essential that you have a recovery plan in place to cover these eventualities. Reviewing your access to a speedy & resilient Cloud network will play a key role in your decision as to if and when you can move all of your business software into the Cloud across your business.

19 Should my Business be in the Cloud? Page 16 of 27 Security

20 Should my Business be in the Cloud? Page 17 of 27 This is one topic that rears its head as a perceived major reason for keeping company data in house and on premise. The reality is that the data centres that hold your business data in the Cloud have very rigorous standards and accreditation that they adhere to. These cover all aspects of security, server failures and disaster recovery. No business can certify a guaranteed 100% secure environment, particularly in today s world of sophisticated hackers, but they will almost certainly be more secure than the vast majority of in house IT networks & servers. Talk to your Cloud infrastructure supplier this will either be your ERP software supplier or their preferred partner. Take references and go visit their data centres.

21 Should my Business be in the Cloud? Page 18 of 27 What is meant by a True Cloud software product?

22 Should my Business be in the Cloud? Page 19 of 27 You will hear the terms true, pure or real Cloud frequently cited by software vendors trying to differentiate themselves from their competition. Explained in non-technical terms a true Cloud software product has two key attributes (and let s assume that pure and real likewise share these.) Firstly, a single instance of the software can run multiple customers systems whilst holding their data entirely secure and separate. The main perceived benefits of this technical architecture are the lower cost of ownership and ease of upgrades and fixes. This is fine but be sure that you are sharing the financial benefits of your software supplier s lower costs! Also if you absolutely need to have bespoke software development, e.g. to support a business process that is unique to you, then examine how this will be managed in the Cloud (costs & service levels in particular.) Secondly, an authorised user regardless of where they are and what device they are using, e.g. iphone, Android tablet, laptop, desktop, can access the software provided they have a connection to the internet and any graphical web browser, e.g. Internet Explorer, Chrome, Firefox. Be wary of any supplier who tells you

23 Should my Business be in the Cloud? Page 20 of 27 that a third party software product is needed to facilitate this as this is not true Cloud and could impact on service, performance and cost.

24 Should my Business be in the Cloud? Page 21 of 27 What are the commercial benefits of Cloud vs. On Premise?

25 Should my Business be in the Cloud? Page 22 of 27 This is where Cloud ERP has the clear advantage over On Premise, particularly for SME s as the upfront investment is significantly reduced. There is no need to buy new or upgraded hardware or to purchase licenses upfront. Instead there is a monthly subscription charge, which is largely based on the number of named users, and the systems they need to access, e.g. Accounts, MRP, CRM, and , Microsoft Office. There may also be cost savings in headcount, or the ability to move people into other value add roles, as there is a much lower need for IT technical skills in the business, e.g. hardware, database skills. Just be sure to model the cost of ownership over a 5 year period to be sure that you have a clear picture of all Cloud vs. On Premise costs whether that s from your existing supplier or potential new suppliers. Be clear also on the minimum period you are signing up to, annual increases and what the notice period is.

26 Should my Business be in the Cloud? Page 23 of 27 Summary

27 Should my Business be in the Cloud? Page 24 of 27 This document is by no means an exhaustive and detailed view of the topic but does lead you to ask some important questions within your business and of your potential software suppliers. Firstly, will Cloud be the future platform for most businesses, i.e. will it cross the Chasm? This is certainly open for debate but given we have adopted the Cloud into our personal lives so readily with apps, social media, TV, music and often deployed this way then you to think this will happen. Secondly, how does your company culture fit with the adoption of the Cloud? If your business is an early adopter of technology to gain competitive advantage then this is one for you today. If you are a pragmatic business then now is the time to kick-off a cross business project team with budget and authority. Even if you are a conservative business then ask the questions of your existing supplier to see if they can offer you Cloud ERP today or have it firm planned. Thirdly, remember that whilst the platform is very important, i.e. Cloud or On Premise, the solution still has to fit your business so check the software features and processes meet your needs. Don t assume that because it s the latest Pure Cloud ERP product that it will have the feature that a 20-year-old legacy system does it may not have them!

28 Should my Business be in the Cloud? Page 25 of 27 Finally, don t forget the practical considerations. Can your sites and users access a reliable and speedy connection to the Internet? Ensure there is a contingency plan if someone digs through your cable connecting one of your key sites, as the reality is the infrastructure isn t all wireless or fluffy clouds magically passing data from one to another! So, each business has to consider this topic, presumably at Board level, to decide on this core component of its IT, and indeed business, strategy. Seek advice and guidance, as always, and of course we would be happy to help! For further information on Cloud Based technology or to find out how Metaphorix can streamline business operations, cut costs and boost productivity visit our website or get in touch

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