Businesses that move their IT from an enterprise system to the cloud often make a number of false assumptions. These decisions can cause disruptions to the organization, increased costs and reductions in customized solutions. Before you decide to move your ERP system onto the cloud, find out the 3 most common false assumptions Dimension System’s hears about.
False Assumption #1: “We’ll use MORE of the features and functionality!”
Many businesses assume that once they move their applications to a cloud based program that they will use their applications much more than they did before. It’s easy to think this, as the system is nice, new and different than before.
In reality this is seldom the case. If you have not taken advantage of the full functionality of your current system, it’s unlikely that you will use the cloud based software any differently. An analogy is similar to getting a gym membership.
You start off with good intentions of taking full advantage of the treadmills, rowing machines, stationary bikes, weights, pilates, aerobic classes, etc., and use this as the primary impetus to change your exercise behavior –for good. So in the beginning you are all in! Then it tapers off, and often times, is dwindled down to little or no new activity as compared to what you were doing before. But the bill keeps coming.
Unless the current system users are willing to change the way they view and use the technology, it doesn’t matter what platform is chosen. So, why change if the users aren’t willing to do the same?
False Assumption #2: “We’ll have better, or at the least the same, level of customization on the cloud.”
One of the selling points of a cloud software program is that upgrades and system maintenance is handled by the software provider. Therefore, you don’t need resources to manage the system and provide system administration to the backend database and infrastructure. The business owner assumes cost reduction without any disruption to the organization’s systems. But how much customizing can actually be done in order to fit your business?
The truth is, cloud computing is not nearly as customizable as packaged, application software such as PeopleSoft or Oracle Apps. If your organization needs complexity in some facet of the system, the cloud provider makes it challenging and in some cases impossible. ”Configuration” changes can be made which essentially allows changes to the look and feel of the application.
This is unlike traditional customizations allowed in self-managed, on premise or hosted, ERP system that provides flexibility, core application changes and a solution tailored for specific business nuances. Before switching to the cloud, consider whether or not your organization can function easily without any control over truly customizing the application.
Here’s what one cloud HCM customer said about their transition to the cloud:
“Every upgrade breaks something in our configuration. They [cloud software provider] seem very focused on things like social, but not on core HR itself. The comp module has become nearly unusable for us. We have nothing but problems with reports.”
False Assumption #3: Perceived Cost vs. Actual Cost
The third common false assumption is a perception that the cloud solution will save money. The idea is that despite hefty upfront costs, in the long-run the organization will save a lot of money. The “sell” is being able to save capital costs for hardware and software licensing, reduce FTE resources as well as the cost of maintaining physical space, including floor space, air conditioning, electrical power, and so on.
Furthermore, cloud-based applications can always run on up-to-date technology without the costs or management distraction of making sure upgrades happen on time and on-budget. The assumption is that obviously, switching to the cloud saves money in the long-term.
While it’s certainly possible to save money by switching to the cloud, it’s far from a certainty. The upfront cost of migrating to the cloud is significant. Even in an optimal situation, it will take several years before the business experiences a return on investment.
Although moving to the cloud can be the right choice for some organizations, it may not be for everyone. There are ways to take advantage of the benefits of a cloud solution, such as trim down operational costs and reduce the stress of keeping your on premise ERP system updated and running smoothly – without major disruption. Contact us to learn more.
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