Now, we are all used to the term “cloud”. This is the name given to technologies that allow computer systems to run from places unrelated to the end users of those systems. The idea is that in an unknown location, a specialized company provides the hardware systems needed to store and process your company’s data. Like emails, files, and even accounting and billing systems. Then, your employees can use this data, documents, and systems through their favorite browser anytime, anywhere. It’s the latest computing rave, and it has a reason, but read on and find out why moving ERP to the cloud isn’t a good fit for every company.
Will you save money by moving to the cloud?
The suggested benefit is that your company can save on the investment in hardware and software required to store all data and systems locally. This includes servers and devices that need to be serviced and replaced from time to time. It is a fact that devices require qualified babysitters to constantly search for them, apply the latest patches, update security, and troubleshoot any issues that may arise from day-to-day operations.
Plus, your company can save on licensing costs for tools like Microsoft Office, which you can rent instead of buying. You also have the added flexibility of being able to change the number of licenses on a monthly basis to optimize their cost based on real usage.
This all sounds good, but it’s not the whole story. Companies still have to do their own research and ask, “Will I really save money by moving to the cloud? “
If you search the internet on this topic, you will find yourself overwhelmed with different opinions. It’s hard to distinguish a sales pitch from truly impartial feedback.
I intend here to add fuel to the fire by expressing my own opinion on the matter.
On the one hand, there are cloud proponents. This includes practically every major player in IT, notably Google, Amazon and Microsoft. All of these vendors aim to replace your on-premises email, file storage and operating systems, and move them to the cloud at an affordable cost.
On the other extreme, there are critics who point out the downsides of the cloud. Just search for “cloud issue” in your favorite browser and you’ll see what I mean. As was the case with other technologies in the past, many people believe that the cloud is a solution looking for a problem.
What systems do you want to move?
The cloud offers many advantages for on-premises applications. In many cases, its adoption makes a lot of sense. For example, when we talk about email and CRM systems, the value of flexibility in operating these systems from different places is very high. However, other cases, such as
Running your company’s most valuable data, such as inventories, prices, cash information, employee, customer, and vendor data, doesn’t require the navigation that email or a CRM relatively does. However, data accessibility and security are critical. This is where the risks of new technology are most evident, especially in less developed countries that may be limited in the quality and strength of their communications infrastructure.
Can you imagine not being able to manage your bills or pay your employees because the “cloud” isn’t available?
We all hear about outages quite often from the biggest cloud players, and even if these never fail, you need to remember that problems can occur at any of your connection links (like your local ISP). Then it’s easy to imagine a scenario where a bug somewhere in the world could leave you out of your systems locally.
Security is another obvious issue we see in the news when it affects a high-profile player as there is no common consensus on how to manage security on the supplier side. Arguably, small gamers, like you, are the most vulnerable to losing their data because they usually lack the hardware, policies, and security measures that the best hosting providers have. So the security issue can be interpreted as a liability and an advantage of the cloud. However, larger players are often the most attractive targets for cyberattacks, and simple local security measures can go a long way to making your local data secure enough.
Then there is the cost. Over time, the total cost of ownership will always be higher in the cloud versus on premises. This is more so in less developed countries where labor is cheaper, and where the life of devices is extended out of necessity. The biggest benefit of the cloud is data security, but it is also difficult to sell to the end customer due to its intangible nature which is hard to prove.
The cloud is here to stay.
Many software systems built today are designed as cloud-only, and for the most part they work very well, and there are no on-premises alternatives. This is proof that the cloud is here to stay, like it or not. There are definitive advantages to these systems and the cloud in general. However, I wanted to point out the inherent limitations of the cloud, given the longevity of the ERP solutions and other systems that power most of the businesses out there today.
Your ERP systems don’t have to be moved to the cloud just because “everyone does it”. Each case must be evaluated individually. The ICON team has been consulting with companies for over 30 years. We want to help you make the right choice of software and get the most out of your systems,
Written by Thomas Garcia, iKON,