CLOUD ERP AND ACCOUNTING: SELECTION AND PLANNING GUIDE

CLOUD ERP AND ACCOUNTING: SELECTION AND PLANNING GUIDE

Over the last three years, well over half of U.S. companies have elected to take advantage of one or more cloud-based solutions or services, but critical business functions like accounting and enterprise resource planning (ERP) often remain on premises. Whether companies have concerns stemming from a perceived lack of control, data security, the ability to integrate with other applications or migration costs, many companies are still questioning whether the cloud is right for their most critical processes and financial data. As host to the largest Microsoft Dynamics customer base in North America, and the leading provider of Dynamics ERP in the cloud, Tribridge created this guide to help decision makers choose the right deployment model for their accounting and ERP solution, including key considerations and steps specific to cloud ERP. WHAT IS CLOUD COMPUTING? The concept of the cloud is simple: It is the delivery of on-demand IT business solutions with limited upfront capital expense or internal technical knowledge. Cloud computing enables companies to access enterprise systems over the Internet without having to purchase, house or support the server infrastructure. Cloud computing vendors provide the platform, security and software expertise as a service, which frees companies to focus more on strategic initiatives. Companies that have already embraced cloud computing are realizing the benefits of agility, scalability and specialized IT expertise with a lower capital outlay. CLOUD COMPUTING TERMS Cloud computing has become a term that is used interchangeably for various models of software licensing and subscription services. This glossary of commonly used terms should help clarify what these terms truly mean. THE CLOUD Essentially, the cloud is the outsourced online infrastructure (i.e. servers and databases) for an application or multiple applications to be accessed through the Internet. The cloud computing resources are outsourced and similar to a utility service, but the cloud can refer to multiple licensing models and here is where decision makers should carefully define a cloud offering. When used in a vague sense, the cloud can refer to hosting only or can be used to reference subscription licensing plus infrastructure services. Either way, the cloud benefits your company by providing the ability to outsource infrastructure and its ongoing maintenance. ON-PREMISE Any computer server or software application that is installed and run on computers physically located on your company s property is considered an on-premise or on-premise IT resource. On-premise equipment is controlled and managed by a company s internal IT group, who is responsible for the security, maintenance and all associated costs. HYBRID Many companies have chosen a hybrid approach to their solutions, maintaining some on-premise applications and integrating them with other systems in the cloud. This model offers the flexibility to accommodate your company s unique business processes without having to force-fit every solution into the server room.

INFRASTRUCTURE AS A SERVICE (IAAS) A model for provisioning hardware (computers, storage, networking, etc.) to the user in which management of the IT infrastructure is controlled by the provider, while the user maintains control of the operating system. IaaS usually includes a pay-as-you-use cost model that allows users to expand or contract their use of the infrastructure as needed ( by the drink ), usually via self-service portals. In situations with ERP, this model is similar to renting a server room off-site, and has historically been known as hosting. A key distinction for this model with ERP is that the customer remains on traditional software licensing, while outsourcing the infrastructure. SOFTWARE AS A SERVICE (SAAS) SaaS applications are the most common type of cloud computing. For SaaS applications, software is licensed on a subscription basis rather than purchased outright. Access to the solution is delivered through the Internet. Most SaaS offerings allow you to scale up and down the number of users at any time, thus adding a cost-saving strategy. PUBLIC VS. PRIVATE? There are two types of cloud: Public and Private. PUBLIC PRIVATE Engineered for the masses Engineered to meet unique needs Uses commodity servers No shared servers Limited customization abilities Can meet higher security requirements Public clouds are standardized and built for massive scale with thousands of users. Public cloud solutions, like QuickBooks Online or Salesforce.com, can be a cost-effective option for many companies, but one must understand the limitations as a generalized offering. Private clouds are customizable to the needs of your organization. They enable you to leverage existing IT resources and offer additional layers of security, as well as increased redundancy through access to a colocation model for data storage. WHY ARE COMPANIES SHIFTING ACCOUNTING AND ERP TO THE CLOUD? Naturally, long-term cost savings related to an on-demand, pay-as-you-go service model is often one of the primary drivers for companies to first consider the cloud for their ERP solution. Control Upfront Costs Subscription licensing enables companies to shift from paying a large upfront capital expenditure (CAPEX) for IT to less costly operational expenditures (OPEX) that allow companies to budget strategically. Lower Total Cost of Ownership (TCO) Cloud deployments have been estimated to cost one third of classic on-premise ERP deployments. Add to that the additional benefits of regular and tested back-ups, redundancy for disaster recovery, and the time savings of a more strategically aligned IT team, and cloud deployments can net to be a lower total cost.

Although many companies who adopt a cloud model ultimately see a lower total cost of ownership (TCO), other benefits not directly related to costs tend to play a larger role in their final decision. A private cloud deployment helps companies get new solutions online quickly, provides the ability to scale more easily and allows internal IT resources to focus on strategic initiatives that often take a back seat to daily maintenance and platform risk mitigation. Greater Speed to Market Cloud deployments of accounting and ERP can be deployed in days instead of the typical weeks or months. This shorter provisioning timeframe enables companies to launch new divisions, new product lines, and scale for peak seasons quickly and easily. Increased Scalability On-premise ERP systems must be designed to handle the maximum number of users which leads to buying more hardware than is needed to keep up with the demand in good times but idle hardware during an economic downturn. Cloud solutions enable you to buy what you need, when you need it. If your company s ERP needs grow or decrease in the future, you can immediately change the parameters (and the pricing) to match the scale. Access to Specialized Skills Even in the largest companies, it is difficult for internal IT groups to cover all of the requisite technology skills needed to implement and properly maintain a customized ERP solution. Cloud deployments of ERP solutions allow companies to rely on specialized partners who are focused full-time on the uptime, security, updating and preventative maintenance of your solution. Ensure Regulatory Compliance There is an increasing need for compliance and reporting to governmental or industry working groups especially if your company works with highly sensitive data. Any cloud ERP system must not only be secure but also comply with even the most stringent of industry standards and governmental regulations. In the early days of cloud computing, security concerns were common reasons companies opted to stick with on-premise deployments for core solutions like accounting and ERP. The idea of shared databases and off-site hosting of transactional data is a risk that many CFOs and business owners were unwilling to take. Today, security is one of the most common reasons companies elect to deploy private cloud ERP. With Tribridge Concerto Cloud Services, our customers enjoy a single-tenant data and server structure supported by a team of dedicated Microsoft Dynamics security experts. It simply is not cost-effective for individual companies to match this level of investment. Keep Data Secure in Any Event Cloud solutions have built-in encryption and redundancies that provide increased data protection, disaster recovery and the unique ability to keep systems available to use without the typical maintenance window internal IT departments use for on-premise systems. These valuable features must be included in assessing the costs of a cloud ERP system. While most internal IT teams are unable to guarantee 99.9% uptime, most cloud providers do. Cloud deployments help organizations solidify their disaster recovery plans, providing an extra level of insurance for business-critical data.

TOP CONSIDERATIONS WHEN PLANNING A CLOUD ERP MIGRATION When a company is ready to commit to a cloud ERP solution, they should follow these general steps to ensure success before selecting an ERP solution and migrating their system to the cloud: 1. Gather a list of your most business-critical requirements How well-defined, understood and documented are your business goals and objectives for a new ERP solution? You ll need to gather a list of your most critical requirements including functional requirements, workflow requirements, system integration requirements, governance, risk and compliance (GRC) requirements, data migration/conversion, business intelligence and reporting, and training. 2. Define your implementation approach and timeframe When moving an on-premise accounting or ERP system to the cloud, you must take note of every data dependency and align your expectations along with your timeframe. How complex will your data migration/conversion be? Are you looking to migrate summary vs. transaction detail? How clean is your data today? Are you looking to get started with a core group of functions and expand functionality down the road? These questions will greatly affect how you approach your implementation and data migration. 3. Perform a value-based and realistic cost analysis Comparing costs of an on-premise implementation versus a cloud one isn t a simple side by side comparison. Efficiency gains with a newer, top performing system, along with the value that backup, uptimes, disaster recovery and other inherent benefits of the cloud bring to your company must weigh into the overall comparison between cloud ERP and on-premise. 4. Examine your IT Needs Determining if a cloud deployment is right for your organization has a lot to do with how you envision support from your IT team or partner. How complete are your current IT policies and procedures in relation to your ERP solution? Do you have an ERP IT plan and is it well defined? Which existing systems are targeted to be replaced and which system interfaces are in scope of the plan? What IT skills do you have in-house today versus skills you want/need help with? 5. Examine your Support Plan Along with determining your IT needs, one must evaluate how support will continue post go-live. How do you envision support from your internal group? How much support do you expect you ll need? LEARN MORE ABOUT WHETHER CLOUD ERP IS RIGHT FOR YOUR ORGANIZATION Take advantage of these resources from Tribridge to better understand if cloud ERP is right for you: > To understand your company s specific cloud needs, take our online Cloud ERP Readiness Assessment to determine the cloud ready status of your existing ERP system. > Dive deeper into the operational fundamentals and economic benefits of the cloud by downloading the Seven Things Every Executive Should Know About the Cloud white paper.

> Learn about the top data security concerns and how Tribridge Concerto Cloud Services address each of them in the What You Need to Know About Securing Payroll and Accounting Data in the Cloud video. Contact Tribridge to learn more about how moving the cloud can reduce your costs, maximize your company s operational efficiency and let you focus on the critical initiatives that drive your business. Visit www.tribridge.com/clouderp or call 1.877.744.1360. ABOUT TRIBRIDGE AND THE CONCERTO DIFFERENCE Tribridge has the unrivaled ability to provide integrated, highly complex cloud solutions tailored to your business needs. An elite Microsoft solutions provider, Tribridge has access to and knowledge of the critical technology requirements, software configurations and implementation best practices for deploying solutions in the cloud. As the three-time Worldwide Microsoft Dynamics Partner of the Year (2008, 2010 and 2012), Tribridge enables businesses to leverage the enhanced benefits of cloud computing by utilizing the expertise of our seasoned Microsoft Dynamics Business Solutions experts, located across the country. Tribridge Concerto Cloud Services provides companies with end-to-end business solutions rather than just providing software licenses and cloud access. Tribridge Concerto Cloud Services deliver: > Cloud-based Microsoft Dynamics AX, GP, NAV and SL > Integration with 3rd party ERP solutions, CRM or Office 365 > Greater flexibility and always up to date software > Secure access from virtually anywhere at any time > Peace of mind that your data is safe in the event of natural disasters LEARN MORE For more information about Tribridge s Concerto Cloud Services, visit: www.tribridge.com/clouderp TRIBRIDGE.COM