By Lisa Nicks, ERP Expert, Fusion5
So, you are in the market for a new Enterprise Resource Planning (ERP), FMIS, CRM or HCM solution and as expected, every vendor who has got wind of your upcoming project is clambering to talk to you about their ‘cloud’ solution.
And so they should be. After all, very little is 100 per cent on-premise anymore, apart from a few legacy vertical solutions which are never likely to be redeveloped to run in a cloud environment.
All major ERP vendors around the world have moved to a Software as a Service (SaaS) revenue stream model (and if they haven’t, they’re well behind the eight ball). You can guarantee that whatever solution they’re trying to sell you is positioned as a ‘true cloud solution’.
As an ERP sales manager with over 24 years of experience and industry knowledge, I can spot which vendors have true born-in-the-cloud solutions and which ones are trying to fake it until they make it.
But how about you? Unless you live and breathe ERP, it’s difficult to distinguish an authentic cloud solution with all the accompanying benefits from a wannabe and all its shortfalls.
It’s a whole new ERP world
Over the years, I’ve seen many good ERP systems come and go. Some have been sold to new vendors and are still being flogged off to customers who have no realisation that the solution has, at best, a limited future. The vendor investment in modernisation and R&D is minimal. Just enough is done to give the product a ‘look-good’ facelift, without improving or addressing the underlying issues.
Other solutions have been sensibly and gracefully retired, reputation intact and risk averted.
With the advent of the cloud, the number of ERP solutions in the market has contracted significantly. However, there are a few good systems still standing, including heavy-hitters like Oracle, SAP, Microsoft and NetSuite.
So, who is doing the cloud right?
Well, for starters there’s Oracle. Oracle’s Founder and Chairman, Larry Ellison, made an astute move when he used his not insignificant personal fortune to back Salesforce and NetSuite.
NetSuite was born in the early 1990s, and officially acquired by Oracle in 2016. It remains one of the only ERP solutions custom designed and developed from the ground up for the cloud at a time when the internet was on the cusp of exploding for business utilisation, and businesses were begging for a solution that would scale with them as they grew.
From the outset, NetSuite was developed to be accessed purely via the internet. That originally meant via dial-up, so the network traffic had to be minimal. Now, they have over 30,000 customers worldwide and a deep and broad solution.
By comparison, you have refurbished ERPs which have been moved from the traditional on-premise architecture and outsourced to hosted cloud environments. While they may have front-end browser access, they’re not architected to deliver the agility that is an indicator of a true cloud solution.
The best of cloud
Why do agility and flexibility matter? Well, in the case of NetSuite, it means you can customise the application without impacting the automatic upgrade.
On day one, you pay your subscription, and from that moment you have a working instance ready and available to configure. So, the speed to implement is considerably faster than that of a traditional on-premise build. You start with out-of-the-box pre-configured, best processes and best practice to leverage. Additionally, you have the flexibility to make customisations such as adding custom fields, reports, dashboards, and workflows – and even do complete form developments – without any impact on automatic upgrades.
Oracle also got it right with their ERP Cloud. Originally known as Project Fusion, this solution has been in the market for some years now, and like NetSuite, was developed from the ground up as a true cloud solution. And it must be said, it makes SAP, Oracle E-Business, Microsoft, and Infor look sadly old and transactional.
By comparison, Oracle ERP Cloud is exciting, fresh, and innovative. It takes advantage of Gen Y features around social and collaboration – in an ERP no less!
So, what’s wrong with a solution retrospectively developed for the cloud?
Some ERPs were designed and developed to run optimally on-premise from the very outset. They were of their time.
For these solutions, operating ‘in the cloud’ was an afterthought, and they are typically hosted, managed, or maintained by the vendor. In some cases, this responsibility passes to a local value-added reseller (VAR) or another service provider. This model dates back at least 20 years, and over all those years, it has never proved to be sustainable or successful.
The problem is that you experience many of the same issues and costs with the redeveloped ERPs as if you were hosting on-premise. But, with the added complication that access is usually slower than if you had the software installed on your own servers! You’re also dependent on a third party every time something goes wrong.
How to spot a true cloud solution
It’s hard to beat pedigree. As I’ve said, a true cloud ERP starts life in the cloud. It’s specifically coded from the beginning to perform better as a fully hosted solution. It has the resources and expertise behind it to host, maintain and manage software across hundreds of servers and multiple levels of data redundancy in its own multi-tenant cloud environments (and multi-tenancy matters, no matter what anyone else says).
A true cloud solution gives all customers the same fast access, from the same cloud. They get continuous and instantaneous access to the latest product upgrades and developments.
A true cloud solution doesn’t have a version. Instead, it’s subject to continual improvements through automated updates, so everyone in a multi-tenanted environment gets to benefit at the same time.
If your vendor can’t confirm that every customer using the solution is on the same release, and gets automated updates, then beware. It’s not the real (cloud) deal.
A new-to-the-cloud solution simply moves the problem from one location (on-site) to another (the cloud) and you as a customer miss out on one of the best reasons why cloud is the leading technology preference – the reduced total cost of ownership.
Ask the vendor these questions:
- How many customers do you have on this cloud version of the ERP in Australia or New Zealand?
- Can I customise my ERP to meet my niche requirements without any impact to the upgrade?
- Was your ERP re-engineered to support cloud, or was it written from scratch as a cloud product?
- What is the history of this exact version?
True cloud is more than being able to work remotely and not having to support operational systems and networks. True cloud ERP solutions are a high-value business asset with a low ownership cost.
If you’d like some help demystifying what’s cloud and what’s not, you could Google it or you could contact me and I can share my years of knowledge and help clear it up for you. I can separate the cloud from the ether and maybe even buy you a coffee. This Partner Content was brought to you by Fusion5. For more information, click here or email Lisa at [email protected].