Should We Implement A Cloud ERP or Legacy ERP System for The Business?
To directly answer this question as briefly as possible: Probably an Cloud ERP.
But in actuality there are a fair amount of considerations when implementing a new
ERP system, and it is important to see if it is right for your enterprise. It is also important
to evaluate all of the alternatives before making such a large decision.
In today’s business world, it can be a struggle
to keep your head above water, let alone manage your company’s resources and
get everyone on the same page. This is why nearly every successful company uses
some sort of ERP (Enterprise Resource Planning Software). This system varies
from company to company but all are used to obtain the same end goal: run an
efficient organization.
ERP Systems Overview
ERP systems in general come with benefits that allow
your company to be cross-functional. ERP Technology takes all aspects of
your business and simplifies them onto one database that provides access to
information in real time and encouraging efficient collaboration. In addition,
ERP systems save time which directly translates to money, as well as cutting
down on human error, as you only have one central location in which to input
information. ERP systems are great for companies that have multiple locations
and are in need of a way to decide how much product to purchase and how to keep
track of what they sell.
Cloud ERP vs. Legacy ERP
Cloud ERP systems are delivered to the enterprise through either a virtual desktop environment, or using sophisticated web browser technology. Both scenarios have all the agile benefits that Cloud technology offers - more flexibility, easier growth, standardized work environments, etc. If your enterprise goals include adaptability, growth and flexibility - Cloud ERP.
Legacy ERP applications are those that have been around for many years, and while their tried and tested functionality is renowned, the aged technology makes implementing, supporting and maintaining these solutions more expensive in exchange for their standardization. Legacy ERP's have well defined business processes that govern the management of an organization. Their strength is their structure. That structure comes at the expense of agility. If your enterprise goal is consistency - Legacy ERP.
Depending on company size, an ERP system may be small or large. Small
applications such as QuickBooks or PostBooks, provide support to a small local business. Midsize ERP Applications like Sage 100 ERP use Legacy technology to provide ERP benefits. Sage 100 ERP has "cloud-flavored" options, but these options in many cases have more to do with marketing than technology. Then there are tier 1 systems such as SAP which often have a blend of Legacy and Cloud technologies and fall firmly into the highest levels of support and management. Evaluating the Differences
When deciding whether Cloud ERP or Legacy ERP system is worth implementing, it is
important to look at both your organizational needs and the corporate culture
of your company, as these two areas are where the most drawbacks can occur.
If you are a company
needs business process structure, or has very simple
organizational needs, a Legacy ERP system might be what you need. Keep in mind that in addition to the software expense, you are also purchasing the "how to run the business" expertise that accompanies Legacy systems, and these benefits will accompany cost. Evaluate the value of the structure support benefits with the cost of those benefits and enter into evaluation of Legacy ERP systems with the understanding that you are buying process and application. Once a system is implemented and driving your enterprise, change will be slow and complex. Depending on your perspective, that may be a good thing.ERP Implementation & Leadership
ERP System Implementations succeed or fail based on your organizational leadership. More than the ERP application itself and more than the consultants implementing it for you, Leadership is the most important factor. Cloud ERP Implementations require organizational leadership more than Legacy ERP because of the innate agility of the Cloud solution. Legacy ERP's require less organization leadership because they impose structure. How your corporate culture will handle the switch to a new system is driven by leadership. In some companies, usually with an energetic employee base,
Cloud ERP change is seen as a wonderful revolution that is here to simplify their
daily lives, but if you have a company where even getting a new coffee maker is
a traumatic experience, a Legacy ERP system is probably more your speed. In some cases,
employees may even “sabotage” the system, where they create problems where
there are none, in order to slow down and impede an ERP’s effectiveness. It is
important to know your employees and make sure to provide proper training to
limit frustration when first introducing the system to maximize its
effectiveness. Your leadership is the primary factor in success or failure.