Hey You, Get Off of My Cloud: CIO Concerns with Cloud ERP Systems
Cloud ERP systems are getting a lot of attention these days. SaaS ERP vendors – such as Salesforce, Workday, Plex Systems and NetSuite – and other cloud providers are demonstrating revenue growth that most traditional ERP vendors aren’t seeing. In addition, many industry pundits already have their epitaphs prepared for the allegedly inevitable death of traditional ERP software as we know it.
The Panorama team helps many clients implement ERP systems each year and we simply don’t see the need to start making funeral arrangements for the enterprise software industry as we know it – at least not yet. While smaller organizations and big companies with narrow functional needs are fueling much of the growth in the cloud ERP market, larger and more complex organizations continue to show concern about the suitability of cloud and SaaS for their organizations’ business needs.
Cloud ERP: The Main Problems
In addition, a recent study of 100 IT Directors in the UK underscores some of the challenges organizations face when they consider moving their ERP systems to the cloud. The research, which was conducted by Damovo UK, highlights a number of interesting statistics. For example:
- 80-percent of IT Directors feel as though they are held more accountable if things go wrong as a result of moving to the cloud
- 78-percent think cloud solutions make IT management more complicated
- 67-percent of those that have moved to the cloud think that it has actually made disaster recovery and business continuity efforts more difficult
- 69-percent delayed their decision to move to the cloud because they had difficulty determining the tangible value of the cloud services to their organizations
- 90-percent think cloud providers should be more accountable and provide more advice
This data suggests a number of concerns and provides interesting insights into the potential objections that CIOs and other buyers of cloud services may have. The research also suggests that CIOs may benefit from a few tips and lessons learned from some of Panorama’s experience helping clients manage cloud and SaaS ERP implementations:
Incremental and phased ERP implementations are beneficial
There are a number of reasons for CIOs and IT Managers to incrementally adopt technologies such as cloud or SaaS ERP systems. Internal organizational resistance, broken business processes related to business continuity and a host of other issues can undermine employee adoption, which can be partially mitigated via a more phased implementation approach. For example, instead of moving an entire ERP system to the cloud, a CIO may instead choose to work out the kinks of moving HR or CRM functions to the cloud before extending to other areas.
Don’t forget about organizational change management and business process management
Cloud and SaaS technologies are pretty slick, so it’s easy to get caught up in the functions and features of these solutions. As discussed above, phasing strategies can help mitigate some of the organizational resistance and adoption issues that typically coincide with new technologies. But it’s important to remember that cloud and SaaS ERP systems represent cultural changes and the need for business process reengineering, not just new technologies. For this reason, it is critical to identify and document new business processes, train people on those new processes and engage in other organizational change management activities that will ease the transition to the cloud.
Leverage expert assistance to help migrate to cloud ERP systems and other cloud technologies
Reading between the lines of the above statistics suggests that CIOs often feel “left hung out to dry” when it comes to adopting new technologies such as cloud or SaaS ERP systems. However, there are a number of consulting and service providers that can guide and coach CIOs through such transitions, while leveraging some of the lessons learned from experts that have engaged in similar processes multiple times in their careers. When searching for a service provider, look for a firm that is technology-agnostic, meaning that they don’t have any biases or allegiances to one specific cloud provider and they have broad and deep experience helping companies similar to yours select and transition to cloud or SaaS ERP software.
Migrating to the cloud is no easy task. Changes to business processes, employee expectations, delivery models and IT infrastructure – coupled with the headwinds outlined in the research above – can make a CIO or IT Manager’s job even more complex than it already is. By keeping the above tips in mind, however, organizations will be better equipped to manage that transition and take advantage of all the exciting technology cloud and SaaS vendors have to offer.
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[This post originally appeared on Panorama Consulting’s 360 ERP blog and is republished with permission.]