Implementation Risk- Cloud enterprise resource planning (ERP) deployments are mainstream—that’s a fact no longer up for debate. While the cloud concept was an easier sell for users of customer relationship management (CRM), travel and expenses (T&E) management, and human capital management (HCM) software, it is finally gaining traction with manufacturing, product design, and accounting, despite concerns over data security and intellectual property ownership.
Cloud ERP Benefits—A Quick Recap
Cloud software solution providers have made great strides in terms of security. And the fact is that most data breaches have internal sources and are not the result of external threats. So, security risk is not the deterrent to cloud adoption that it once was.
On the other hand, companies give paramount importance to the speed of deployment. The go-to-market speed depends largely on deploying out-of-the-box or standardized processes.
In addition to faster time to value, other typical benefits of cloud ERP software deployments are lower initial costs and predictable expenses (recurring subscription fees). The cloud also eases the IT burden for companies: rather than worrying about managing the physical hardware and local area networks and performing mundane IT maintenance, a company’s IT staff can focus on core competencies and tasks that add value.
Cloud ERP deployments can be particularly convenient when a company needs to quickly roll out a software solution to its remote subsidiaries. They are also useful if a quick proof of concept or a pilot project is needed for a specific department.
Last but not least, cloud ERP software goes hand in hand with new technologies like mobility, the Internet of things (IoT), artificial intelligence (AI) tools like conversational bots, and the like.
Potential Implementation Hurdles
But cloud ERP software is not a panacea. Implementing ERP software—whether cloud or on-premises—has never been easy. Scope creep—unplanned customizations, unbudgeted costs, and additional time and effort—is a frequent reason for customer disappointment.
Even worse, the customer may realize that the software solution isn’t a great fit for the company’s needs after all. This can be the result of the vendor and/or its partners overselling the software’s capabilities. Or perhaps the customer’s project team did a poor job of identifying the company’s requirements.
A thorough, objective software evaluation that methodically accounts for a company’s needs and priorities can help set realistic expectations for a successful software implementation.
How Vertical Cloud ERP Solutions Mitigate Risk
Scope creep is even more common with cloud ERP software deployments, since implementers are limited to the type of customization they can apply to horizontal ERP software (in a true multi-tenant cloud setup, altering code is not a viable option). So even after many cosmetic system modifications, cloud ERP software customers often end up with a solution that doesn’t fit their exacting needs.