Defining The Business Case For Cloud ERP Solutions

Saleah Laher

Today, every organization needs to reimagine its business model. Customers expect businesses to meet them anywhere, any time, on any device. Processes across the enterprise are changing by demanding real-time data for maximum capabilities.

To make this speed of innovation and service possible, businesses must adopt cloud systems. Cloud is the direction of the digital age. Some businesses still see cloud ERP software as the future, but I’d argue it’s what businesses need now. It’s not coming, it’s here.

Let’s look at 10 building blocks that form the business case for intelligent enterprise resource planning in the cloud:

1. The business benefits of the fit-to-standard process model

Intelligent cloud ERP brings your core processes in line with industry best practices through a Fit-to-Standard model. Rather than creating your own rules and building on an increasingly customized foundation, Fit to Standard brings processes into alignment with the most effective and efficient core business processes. It’s a major break from the complex, customized ERP implementations of years past. With a standardized core, you can better understand what you need to do and how to accomplish processes more efficiently, leaving you free to focus on moving faster and deploying technologies that truly differentiate you from the competition.

2. Speed to value through accelerated deployment and ease of use

When business is moving faster than ever, it’s essential that you have a core ERP system that’s fast and infused with intelligence. Fast to deploy: quickly implement your new system across the organization and bring your core processes on board, with implementation measured in weeks instead of months or years. Fast to upgrade: regular upgrades and releases per year pushed through the cloud, enabling the deployment of new capabilities more rapidly than with an on-premises deployment. And fast to adopt: simplicity of the user experience through the easy-to-use interface that takes lessons from the best of consumer-friendly applications, and full mobile capabilities to reach traveling staff and distributed workforces.

3. Streamlining of program support landscape for training, testing, experimentation, and development

Unlike developing custom extensions and programs for legacy ERP – where reliance on outdated languages and frameworks can lead to excess complexity and a shortage of talent – advanced ERP in the cloud enables an agile test-and-learn culture. With the cloud framework, you can work in an environment that powers rapid innovation and low-cost, low-risk experimentation, while accelerating time-to-value in technology investments. This is helped by cloud SDKs that enable you to build and implement your own extensions without touching the underlying code.

4. Public cloud means never falling behind on update cycles or missing new capabilities

When your system is a customized on-premises deployment, it’s standard to go years between upgrades. Updating your ERP can be held back by all the intricate and fragile integrations you run with other enterprise software. By contrast, web-based ERP can update multiple times per year and push out new capabilities based on the latest technologies, bringing benefits based on streaming analytics and machine learning that let your business outpace the competition.

5. Scalability on demand for companies with fast growth or fluctuating needs

An ERP system based on your own provisioned servers brings a great deal of labor and risk when you need to expand. Further, businesses that have short but intense peaks of demand end up investing in hardware and software to meet the “high water mark” that leaves costly resources idle the rest of the time. There is another type of scalability, one that powers future growth by supporting multiple languages, currencies, and internal business entities. In all these respects, cloud-based ERP provides scalability far beyond traditional ERP.

6. Process improvements through a logical general ledger landscape with disciplined framework

Many companies find it challenging to balance material, capital, and labor costs against the need to produce and deliver fast enough to meet market demand. One source of frustration is the inability to maintain all relevant information in the system, which leads to reliance on disparate and non-synchronized data to make decisions. With a logical general ledger landscape, business can integrate and embed intelligence in processes with one single source of live information, enabling coordination of planning and execution processes. This enables an immediate view of the bottom-line impact of business decisions in real time.

7. Greater operational predictability for performance, stability, and security

Next-gen ERP cloud systems significantly reduce the amount of redundancy and onsite security a business needs to bake into technology strategy. It also boosts performance by providing scalable, high-uptime services. These factors enable organizations to gain more confidence in their systems and run with greater internal consistency and predictability, with fewer system outages and reduced operational complexity.

8. Investing in true business differentiation rather than “keeping the lights on”

Upkeep and innovation are mutually exclusive goals. The resources that go into keeping the lights on with reliable performance of existing systems are resources your business is not investing to develop core business differentiation capabilities. Further, once built, those differentiators can add major upkeep overhead on customized ERP systems. With an intelligent cloud ERP, business-differentiating capabilities are free to live as lightweight extensions without customizing the core code. The upshot to trusting smart enterprise resource planning software to run your standardized processes is that your business can focus on services that add real value instead of daily maintenance of existing code.

9. Improved agility by removing dependency on batch processing and moving to real-time reporting

The future of business software is in applications that learn from users and processes, provide information to people in a context that helps them make better decisions, and offer real-time analytics on streaming data at scale. Traditional ERP is unsuited for all of these value-added capabilities, in large part due to reliance on batch processing. Asynchronous and outdated information mean users are waiting for current information, subject to data bottlenecks, and are always a step behind the reality on the ground. Intelligent ERP tools, streaming analytics, and real-time data empower users to move faster and share a live version of the truth with all colleagues on the system.

10. Prepare for the future by adopting the latest in business capabilities

Although machine learning and AI are relatively new to the enterprise, they hold tremendous potential. Software that learns from the people who use it and can predict what information they need in a given context is a force multiplier for every business function. In this way, intelligent cloud ERP is less a reactive platform that users direct and instead is a living system that interacts and anticipates the needs of each user. It is challenging for on-premises ERP deployments to take full advantage of machine learning and AI because these innovations are changing so fast – two- to three-year upgrade cycles are too slow to benefit from the latest advances. When cloud-based ERP suites are updated multiple times per year, customers can be confident they will have access to the latest business-transforming technology.

Uncertainty is here to stay, which is Why Strategic Plans Need Multiple Futures.

This blog was originally posted on LinkedIn Pulse.

Saleah Laher

About Saleah Laher

Saleah is the Global Chief Operating Officer of SAP S/4HANA Cloud. With over 30 years Information Technology and business experience, he is an accomplished leader, passionate about business development and customer experience.