It seems like every day there are more ‘Cloud’ solutions, and we hear that ‘Cloud is the way to go’ as though it is a panacea for all situations. There are, in fact, some advantages to Cloud platforms, and using them for ERP solutions makes sense in many cases. Those moving to a Cloud-based ERP should have a good understanding of what ‘Cloud’ means – and what it doesn’t mean.
First of all, the term ‘Cloud’ refers to large data centers that ‘host’ systems, and access is gained through the internet. This access is typically done in a secure manner, over some sort of VPN (Virtual Private Network) that creates your ‘tunnel’ into the system without allowing others to break in. There are many advantages to using Cloud-based ERP solutions, such as:
1. Security – on many levels Cloud solutions make your life easier. You don’t have to keep up with antivirus software, and the multi-level authentication in place on most systems prevents encroachment by ‘bad guys’.
2. Low cost of engagement – there isn’t any requirement for buying servers, you just pay a monthly fee and log in.
3. Simplicity of use – you don’t have to worry about backups or managing the workload of the system. That is all done by the service provider. The cost of all this is part of the monthly fee.
4. Scalability & de-scalability – You can add users month by month as needed if your organization grows, and if it shrinks, you can simply stop paying for them. There may be longer-term agreements, perhaps up to a year, but in a volatile environment using a Cloud solution makes the fluctuation in staffing easier to handle. If you don’t use a Cloud solution, you may end up paying lots of money for user licenses that you may not need after a year or two, but you are stuck paying for them. There are no ‘give backs’ if your company shrinks.
5. Portability – a Cloud-based system is deployed over the internet, so if you move offices, or need to operate in remote locations, the Cloud system is wherever the web is.
6. Cool factor – you can boast to your friends that you’re ‘running in the Cloud’.
7. Environmentally Friendly – instead of every company buying their own server, and backup device, and building a computer closet, etc., multiple companies share a server, so overall, it’s more ‘eco friendly’ to be in a Cloud deployment.
7 Reasons NOT to Move to a Cloud-Based ERP
Now, this is all well and good, but you may also be wondering why ‘not’ be in the Cloud. Here are 7 reasons why you may not want Cloud ERP solutions:
1. Accessibility – there are still places where reliable, fast internet service is just not available. If you don’t have the internet, you don’t have your system.
2. Cost – Cloud is typically the MOST expensive way to access software, especially when you look at a 5 or 10-year total cost to operate. In fact, the typical ‘break even’ when comparing on-premise to Cloud solutions is between 2-3 years.
3. Flexibility – when you are in a Cloud environment, you don’t have complete access to the root directory on the server, or the ability to extend properties or modify the product. Some systems allow partial ability to add fields or tables, but not the full flexibility you would have if you have full rights to your own database. This may not be necessary for most people, but if you want complete ability to modify the product, you likely won’t want to buy a Cloud product.
4. Connections – if you’d like the ability to connect to systems other than what is provided, you will likely get pushback from the Cloud provider.
5. Asset vs expense – this is similar to the ‘lease’ vs. ‘buy’ decision for cars. If you are in a Cloud solution, you pay an expense monthly and don’t build any equity-like leasing a car. If you buy a solution, it is an asset of your company, gets depreciated, and provides tax advantages over time.
6. Financing – today there are more progressive financing vendors who will finance ‘soft’ costs, such as training and implementations, along with the hardware and installation of the software. This approach can deliver the product to your firm at the least monthly cost, while paying for a solid asset over time that can then be depreciated and listed as an asset.
7. Armageddon – depending on your view of potentially terrible events, if for some reason the Internet is down across the entire country, you can literally ‘unplug’ and run your server and application without any connection to the rest of the world.
Contact EpiCenter Today to Learn More About Our Cloud-Based ERP Services
EpiCenter ERP Services represents Epicor Software, and we can deploy Epicor either through Cloud-based ERP or on your premise. And, if you start in the Cloud, you can export your data and load it onto your own server at any time so you have the most flexibility of any ERP solution. Contact us to share your unique needs, and let us help you with this decision – and we don’t ‘have a dog in this hunt’. We can objectively share the pros and cons and help you come up with the best option for your situation.