ERP Cloud Deployment - Is your head in the Clouds?

Pat McGrath February 17, 2015


Infor CloudSuite

If you recently attended the Infor CloudSuite Webinar, you might have a few questions and maybe even a few concerns.(For more information on Infor's CloudSuite, please click on the link below the first graphic)

Certainly, there are many varied "opinions and debates" to be had relative to the options. Is the “on-premise” solution that you have the best option for you? Or maybe you should be considering a move to the cloud.  Is the time right? Is the time now?

Time is an important element to consider and possibly “the time is now” to start evaluating your systems deployment options. Definitely, you will need to take the time to study, plan and act based on your:

  • Needs
  • Priorities
  • Budget
  • Schedule

In order to determine the most logical path for cloud based deployments, which may or may not include ERP systems, most start by reviewing enterprise systems as they relate to the criticality of that system to their business.

As with most business decisions, this decision will have both a strategic and a tactical perspective.  Perhaps you have already moved some systems to the cloud or selected a cloud based option for some of your systems (Microsoft Office, CRM, and HR to name a few). That being the case, some of your work may have already been done.


Cloud Systems Deployment Costs

Let’s break this down and take a look at a few of the big ticket items as you evaluate your ERP system  “on premise” vs the cloud. First, understanding the Capital Expenditures (CAPEX) compared to the Operating expenditures (OPEX) often drives discussions of moving from huge capital investments vs paying for what you need, when you need it. 

Starting with  the financial accounting for each option review:

  • Financial Considerations and Potential Benefitscloud vs on premise costs savings

o   CAPEX vs OPEX

  • Total Cost of Ownership (TCO) and Return on Investment (ROI)
o   Software
o   Hardware
o   Maintenance
o   Training
 
It is always good to have another perspective. As you can see, Yankee Group’s research (above) paints a compelling picture based on costs considerations for on-premise vs cloud based systems, showing cloud costs being 77% less.

ERP Deployment Considerations

Needless to say, costs and costs savings are not the only consideration. Other areas to understand in your review and planning process,  include:

  • System Customization Needs
    • Level of Customization
    • Type of Customization
    • Options Available to Customize
  • Sunk Costs
    • Monies already invested in an “on premise” solution
      • Hardware, real estate, etc.
      • Ability to transfer dollars spent for an on-premises solution to a cloud based system
  • Systems Integration Requirements
    • System Location and Types
  • Resource Allocation
    •  IT resources and user support role changes
  • To be covered in a future blog post
    • Systems Management
    • Service Level Agreements (SLAs)

ERP Cloud vs On-Premise Considerations and Benefits

Regardless of the systems deployment model that you have today, there are benefits to consider for major systems and system functions as you plan your journey into the cloud (Figure 1). Each option  has strengths, risks and rewards. Every system is not right for the cloud, today, nor should every system be deployed on-premise.

cloud_benefits

Figure 1 Strengths and Benefits - Cloud vs On-Premise

Evaluate each option in context. What is the importance of that system to your core business function?  Much like past sourcing decisions have been based on deciding when a vendor offering is the best option, cloud follows a similar path. The significance of each business system should be the primary determining factor when making an on-premise or cloud based system decision.

Look at each system and determine the benefits to be realized, consider the risks and create a plan.  Your plan should allow for business priorities, systems integration considerations, data sharing and user access requirements (internal and external).

Don’t forget the day-to-day activities that any cloud based solution will need to provide, including: Security, Business Continuity, Disaster Recovery, Backup/Recovery, SLAs and user support. More on these area in my next blog post.

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Cloud or On Premise Decisions and Planning

If you’d like help, B-WI's Infor CloudSuite services are designed for you. Remember, now, more than ever, the key elements that contribute to any solution demand knowledge and talent in the form of: people, process and technology. That is and always has been what we provide to help determine the best solution to meet your goals.

If you would like to talk about your Cloud Initiatives, please reach out to me or our team of consultants here at Barry-Wehmiller International. Contact me at Pat.McGrath@B-WI.com . Wishing you success in all of your endeavors! ;-)


 

Other Information Sources

InfoWorld http://www.infoworld.com/article/2610801/iaas/there-s-no-future-in-on-premises-it----it-s-time-to-move-to-the-cloud.html

Gartner http://www.gartner.com/newsroom/id/2658415

Infor Could Suite Information Sources http://www.infor.com/cloud/

Infor Executives on Infor Cloud Suite http://progressive.uvault.com/2361/2014/corp/014-268-CloudSuite-executive-message-1280x720.mp4

Cloud Computing Journal at Cloud Expo with Infor http://cloudcomputing.sys-con.com/node/3238515

 http://www.barry-wehmillerinternational.com/enterprise-solutions/infor-global-solutions/infor-syteline

 www.b-wi.com

About B-WI: At Barry-Wehmiller International (B-WI) we are proud of our remarkable journey, a journey we began 20 years ago to become who we are today – a trusted, global, people-centric, ‘Total Solutions’ provider with a rich heritage in manufacturing. We take particular pride in our people-centric culture and values. 

We have built a strong foundation, we are here to lend a hand and be a guide to our customers with our specialized consulting, technology, engineering and manufacturing talent. We were there then, we are here now and we will be there with you into the future. Welcome to Barry-Wehmiller International.

 

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About the Author: Patricia McGrath is pleased to represent Barry-Wehmiller International, as Director of Strategic Initiatives. B-WI provides consulting and services for manufacturing, engineering, ERP solutions, including specialized development and support services. Pat’s career includes positions with such prestigious companies as IBM and KPMG. While there she focused on strategy, ERP business partners and business consulting, plus having her own company working with others to develop strategic initiatives and tactical plans.

Topics Enterprise Resource Planning