Not all companies have an interest in migrating their on-premise ERP to a Software as a Service (SaaS). But according to industry observers, those who have an interest in it all share certain characteristics.
Here they are.
They are new. “Starting from nothing” rhymes with “absence of inheritance”. And it’s the failover – even from a cloud application – that is the source of most of the risk.
They operate in emerging sectors and are highly competitive. These companies tend to be more open to the cloud, which is then envisioned as a competitive advantage. Cloud ERP has become a must-have.
They have generic processes. Companies whose value does not come from a process largely driven by ERP – in the manner of, for example, technology manufacturers in general – will be well served by SaaS solutions.
Their data is not complex. Applications like email are easy to move, as well as their data. Others, on the other hand, induce compliance and data migration issues that are best avoided. ERP is no exception.
They require little customization. Taking applications largely as they come is the hallmark of SaaS solutions. Even if there are exceptions and ERP solutions in SaaS can be – natively – highly specialized and adapted to specific sectors (like Infor’s micro-vertical strategy ).
Their requirements are uniform in terms of data. Software that constantly purrs (24×7) will get little benefit from the variability of cloud resources. In his case, an in-house run will probably be more economical.
The country or sector in which they operate is poorly regulated. Some countries are strict about the physical storage location of sensitive data. The SaaS solution may not have servers on the required sites.
They operate in a service industry. Managed, and in some cases digitally-enabled products are easier to move to the cloud than goods – physical or digital – produced within a complex and personalized infrastructure. Even if there again, there are exceptions .
Its employees are spread all over the world. Cloud makes it easy to connect to a particularly remote workforce.
They merged with other companies. Cloud ERP can help integrate business, especially if one is already in the cloud.
Also remember that for Gartner, the cloud will upset the very integrated and ultra-specific ERP approach. But that post-modern ERP will combine on-premise and cloud applications in a more hybrid approach than 100% SaaS.