Cloud ERP: dispelling the ‘challenges’ myth

When it comes to implementing cloud ERPs, there’s a lot of misconceptions around what’s involved and if the benefits of doing so are worth it. But why?

It's like the "never change a running system" attitude that many organizations rely on means their technology and business decision-makers tend to take a risk-averse approach to moving their ERP to the cloud. Although, our recent research with Computing Research into the benefits of cloud-based ERP shows that organizations who migrated their ERP to cloud are reaping gains, which significantly outweighed the risks and challenges of the actual migration.

Perception: "Cloud ERP is Always a Challenge”

From our research, the cause of this misconception actually stems from the challenges older, non-cloud ERPs present the organizations still using them. The brief is simply that migrating to the cloud would simply add another level of complexity to an already cumbersome solution.

The reality is, a cloud ERP isn’t simply your existing solution in the cloud. Most on-premise solutions are too old and too bespoke to simply be moved to the cloud. But this only adds to the perception of difficulty.

This is because ruling out a simple ‘lift and shift’ and needing to replace their entire solution just to move to the cloud seems like a lot of work and even more expense for little return. Are they right?

Reality Misalignment: Who Really Finds Cloud ERPs challenging?

From our research, we’ve found a reality misalignment. For those who had migrated, the challenges never lived up to the expectation. Interestingly, the gap between expectation and reality was marginal for this group but significantly larger for those who had not migrated.

This suggests that for hesitant organizations, concerns about migrating to a cloud ERP are out of alignment with the reality of migrating.  Meaning the people finding cloud ERP implementation most challenging are those not doing it. And it’s a bit problematic.

This misalignment between perception and reality was biggest when discussing security, data sovereignty, and compliance. Here, respondents followed a long-established pattern, as security concerns feature in almost every cloud ERP discussion.

As cloud solutions have matured over the last decade, security has improved hugely, and most decision-makers know that. Yet they are still concerned. It’s a cognitive dissonance that’s proving difficult to dispel.

Security wasn’t their only concern, with many raising technical skills shortages as a challenge to implementation. But again, the reality of this challenge was also significantly less than feared.

For more detail on the misalignment between expectation and reality, you can read the full results of our research here.

Reality: Cloud ERP Benefits Outweigh Challenges

Despite being concerned, respondents, like everyone, already broadly acknowledged the benefits of cloud migration. Agreeing that moving would offer considerable benefits like improved scalability, productivity, reduced operating costs and, perhaps most importantly, easier remote working.

In fact, 69% agreed somewhat or strongly that “migrating to a cloud-based ERP environment creates significant business opportunities.” This begs an obvious question. Why haven’t more of them done it?

The reason more haven’t moved? Again, it’s the perception that migrating brings challenges. Overall, nearly three-quarters of the decision-makers we spoke to expected significant challenges in the course of ERP cloud migration – whether they had migrated or not.

Again, ’challenges’ comes up. Yet again, without grounding. Above, the cloud's reality was nothing like the expectation, while here, we have benefits that far outweigh what challenges there are. But still, decision-makers are hesitant. What can be done?

Unit4 are dispelling the myths around migration

Facts are the way forward. The good news is, in our research, we found that the challenges experienced by those who had made the move to a cloud ERP were always less severe than anticipated. We also found that for those who had migrated, the challenges from day-to-day cloud ERP operations were far less significant than those of migration.

Also, barriers around security, data sovereignty, and compliance were easier than anticipated. Again, the type of cloud platform plays an essential role in determining how challenging these areas are. SaaS providers are responsible for securing their application. Customers only need to worry about securing their endpoints and identifying users correctly. Those using cloud infrastructure are responsible not just for securing endpoints and users but also for securing their applications.

More good news came in the finding that the shortfall in technical skills was not as acute as feared. This was because organizations looked at their existing employees to fill gaps in skills. This, in turn, helps to overcome the problem of cultural resistance to change as employees become part of the process of change rather than a barrier to it.