Are the Concerns Over Cloud ERP Valid?

Cloud computer network world mapLast week, we discussed the significant benefits of moving your enterprise resource planning (ERP) system to the cloud. If these benefits are so great, why isn’t everyone doing it?

The Aberdeen Group researched this question. They discovered that organizations that were not willing to consider a SaaS ERP deployment had two major concerns—security and stability. Sixty-six percent (66%) identified security as the key factor. Other factors that concerned these companies included control of the upgrade process (38%), downtime risk (30%), and lack of ERP customization (35%).

While these concerns are understandable and should be addressed when choosing an ERP deployment, another Aberdeen Group study should alleviate the worries over cloud applications. A robust cloud ERP solution can mitigate and even eliminate these issues. Let’s look at them in detail.

Alleviating the Concerns Over Cloud Software

Security Concerns

The main concern many organizations cite as their reason for not moving to a cloud ERP is security. These companies are concerned with the safety of their sensitive data. This is a valid concern that should be addressed with your ERP vendor and hosting site. The key question to ask is whether your data will be more or less secure at the cloud application hosting location.

The Aberdeen study found that, on average, companies with on-premises solutions had more security downtime than those with cloud ERP. Perhaps on-premises solutions are not as secure as a company would prefer to believe, or perhaps, a cloud hosting organization, whose existence depends on the ability to provide a safe and secure location, is more capable.

Lack of Control

Another reason companies may choose an on-premises model is that they wish to control their software and the upgrade process. This is often due to concerns about the need to highly customize their software to address unique process requirements. This is a concern that you should address with your vendor as cloud software, even in a SaaS deployment, can be customized to meet specific needs.

Included in this category is the concern over giving up control of a system that runs a company’s entire business. This may be due to strategic reasons (security) as well as the need for customization. While the perception may be that only “simple” ERP solutions can run in the cloud, this is not true. There are many full-featured cloud ERP systems available today. Many traditional ERP software systems are now available with cloud deployment options.

Downtime Risk

Finally, companies are concerned about being reliant on a high-speed Internet and an external hosting site for cloud software uptime. However, the Aberdeen Group data show that companies who have a cloud ERP have less data loss and lower downtime than companies that have on-premises ERP.

While full cloud ERP deployment may not be for everyone, every company should consider how web capabilities in their ERP can be used to increase productivity and flexibility. Companies who deploy cloud-based ERP are gaining a competitive advantage. Remaining stagnant in your ERP implementation may put you at risk of falling behind in competitiveness and profitability.

Mindover Software specializes in pairing small and mid-sized businesses with the best ERP solutions to meet your needs and help your organization be more efficient, competitive, and profitable. Contact us if you would like to discuss your ERP implementation and how web-based capabilities can enhance your operations. Whether you wish to add cloud deployment to your Sage 100 or Sage 300 software, or if you wish to consider a SaaS or cloud deployment with Acumatica, we have a solution to meet your needs.

To learn more about the Aberdeen Group’s assessment of the risk of cloud applications, download our free whitepaper, “SaaS and Cloud ERP Observations: Is Cloud ERP Right for You?

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