When three quarters of business leaders say their current on-premise ERP system isn’t meeting their needs, it makes you wonder why they’re not doing anything to upgrade. For many of them, the answer is often, “Been there, done that.” And they weren’t happy with the results or the costs.
The on-premise ERP systems that many companies use today trace their architectural and operational roots back to the last century. Sure, these systems can be upgraded to mimic modern capabilities. But by the time upgrades are completed—usually at great cost both in dollars and effort—the ERP system is capable of meeting only those requirements identified when the project was initiated, and not much of what has changed since then.
Newly upgraded on-premise system are often several years out-of-date when they go live, and soon the next upgrade cycle has to begin. It is an endless treadmill that makes companies tired and only enriches consultants.
For any business leader who’s been stuck on the go-nowhere-slow treadmill of upgrading a legacy on-premise ERP system, it’s easy to understand why many of them wonder, “Why can’t I just get by with what I’ve got?”
Maybe some companies can make do with the solutions they have. But for companies with bigger plans for their businesses, there are a number of situations that make transitioning from an on-premise ERP system to a modern, cloud-based solution a great idea.
Here are 10 of them:
Easy scalability coupled with regular, off-premise software upgrades of cloud-based ERP solutions address the common concerns listed above. It offers even the most skittish business leaders a less worrisome way to keep their business applications robust, current and modern.
And cloud-based solutions immediately divorce companies from many of the past problems and costs with ERP since organizations avoid having to maintain hardware, databases and staff to support them.
Companies are also freed from the shackles that limit their flexibility, enabling management to focus on running the business using the plethora of information ERP systems collect and process across their entire enterprise.
“We were in the process of doing an upgrade of our current [on-premise] system and it was a good time to make a move to a longer-term, more sustainable model, moving away from maintenance projects to more rapid upgrade which will reduce costs.”—Stacy Pearson, Vice President, Finance and Administration, Boise State University
But most importantly—considering the less-than-satisfying experiences many executives have had updating legacy on-premise systems—cloud-based ERP systems give businesses great flexibility to implement solutions rapidly at their own pace.
And since the cloud is a flexible platform that lets companies take these incremental steps, they can ensure they’re going down a path that meets their business needs. Companies can initially target specific problems or opportunities, or work around the edges of the business to first prove the capabilities of cloud-based solutions. As implementations begin to prove themselves, business leaders can confidently proceed with more far-reaching projects.
The broad offering of Oracle ERP Cloud is helping companies transition away from legacy on-premise software. Offering everything from financials and procurement to supply chain, manufacturing and project portfolio solutions, Oracle helps different departments or divisions within a company spearhead cloud-migration initiatives. Based on those experiences, other groups can then choose to optimize their own ERP process with a transition to the cloud.
We’ve also seen some of our larger customers test the waters with their subsidiaries. Trying to operate a number of subsidiaries on a single on-premise model often results in a long list of nightmares, including licensing, customizations, and the lengthy delays associated with deployment. With cloud-based solutions, companies bite off projects in manageable pieces, monitor their success, and then roll them out cost-effectively to other operational units.
Built-in modern best practices permit standardization, which further lowers cost and increases productivity. Even when a cloud transition is incremental, access to a complete suite of integrated best-practice business processes means customizations are completely avoided.
All companies need to ensure they have the tools in place—or can add on to them quickly and efficiently—to maintain their competitive edge. Cloud-based ERP systems empower companies with all of the capabilities they need today and quickly scale as business requirements grow.
In my next post, I'll talk about what makes an ERP system "modern" by today's standards. If you'd like to learn more, I encourage you to download our latest handbook, "Your Complete Guide to Modern ERP," or check out the infographic below.