Last updated on January 16th, 2023
Enterprise Resource Planning (ERP) system is an integrated software system, helping companies to manage various projects, procurement processes, and accounting. It is considered one of the older segments of the business software landscape.
For many departments, ERP systems usually meant time-consuming, costly, and huge deployments, which needed heavy maintenance and significant investments in infrastructure and hardware.
However, the arrival of cloud technology has completely changed the way businesses function today. ERP on the cloud allows businesses to streamline their processes and ensure a quick return on their investment.
According to a survey by McGladery, 54% of respondents said that upgrading or changing the existing ERP application consumes most of their time. With cloud-based ERP deployments, companies become independent of regular upgrades or maintenance and see reduced IT costs.
Reduced implementation cost is one of the vital benefits of cloud ERP systems. According to Panorama’s 2016 ERP report, 56% of respondents using cloud technology experienced a cost saving of at least 20% with regards to implementation.
In order to complement the ever-evolving technology stack, most businesses are now updating their ERP systems. In fact, the year 2017 witnessed the highest levels of cloud adoption to date.
When should ERP modernization be done?
A smart technology not only enables new processes but also enhances business results. A traditional ERP system can be a drain on any business, driving high costs, inhibiting speed to market and holding back innovation.
If your company isn’t performing regular ERP system updates, then you are risking both the reliability and functionality, which further leads to losing money.
It is the time to modernize your ERP system if:
- There is no multi-tenancy support for traditional ERP system which reduces scalability and efficiency
- It costs more to support the traditional ERP system, making it difficult to provide a new software upgrade
- There is an outdated UI/UX
- On-premise ERP system requires a huge investment to buy and manage the system
- The ERP system is unable to handle the growing number of users
- The ERP system is unable to adapt to changes in market conditions, business processes and compliance regulations
While modernizing the ERP systems, one of the common concerns among businesses is that of being forced to start over and throw everything away. People think that they can either have an on-premise ERP system or on the cloud. However, this is not the case. With the hybrid cloud, businesses can host their process both on on-premise as well as the public cloud.
Instead of making the transition altogether, start by modifying small parts, be it project management, procurement or customer service support. They can function well coexisting with what you already have in place.
Three Ways to Modernize ERP Systems
Moving ERP systems such as Sage 100 onto a modern infrastructure such as cloud holds many promises for companies who want to reduce their IT costs and convert their savings into a competitive advantage.
Modernization makes sense if done in the right way, and the pitfalls are prevented. These three aspects can help you modernize your ERP system.
1. Data Migration
One common challenge faced by companies while modernizing the ERP systems is migrating and integrating the data with the cloud. Check your existing data and then perform a cloud readiness evaluation for the applications. This would help you assess your applications, set-up, and data availability for the cloud.
The migration of data is good to optimize your existing applications. It also gives you an opportunity to analyze your portfolio and cost structure to find the platforms which are well-suited for your business.
When you have reached a decision, ensure that the data is prioritized according to tiered migration – dataset which should be migrated by the launch date, which can be stored, and which can wait to convert.
2. Planning and Processing
Planning is essential for a good result while modernizing the ERP systems. All your applications are important, and therefore, while moving your applications to the cloud, downtime is not an option.
Make sure that you evaluate where the application should be living. The multi-cloud approach allows the applications to be where they are best suited. Check which cloud matches your requirements and what are the benefits of each cloud model.
It is important to have realistic estimations of transition cost and time needed to avoid downtime issues. You can use unified management techniques to make this shift risk-free. Security should be a priority throughout the process. Good planning can help you better understand your business so that you can run it efficiently.
While modernizing the ERP system, the transfer of knowledge is important, particularly during the initial stages. This can be achieved through interaction and collaboration. Ensure that the users map to the skills needed and trust in having a briefing which would train and prepare the employees with the tools and skills to make ERP modernization a success.
Wrapping It Up
Most companies invest in modern ERP systems to get access to the digital world and analytics. Most of the advanced features originate natively out of the box with modern ERP offering. There is no need for you to build a customized or personalized solution in your modern ERP system indicating some obstacles to implementation.
Whether you want to upgrade the ERP software system or gradually move parts of your business to the cloud, staying updated would give you the flexibility and insights required for growth and success.
Regardless of the method you opt for, it is essential for you to go through the features thoroughly. It is impossible to know what technology will be used after ten years from now, or where these solutions might find you, so how flexible is the solution in the long term?
Is there flexibility in database, platform or is it proprietary? If you have the clarity of your business requirements, consultants or vendors can present you with a clear solution for your business.
Are you planning to move your ERP solution to the cloud? Tell us in the comments section.
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