Your definitive guide to Cloud ERP, part 5: How to move on up to Cloud ERP

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Categories: Cloud, ERP
November 21, 2017
Cloud ERP

Migrating your ERP to the cloud means careful planning of resources — both financial and personnel.

If you’ve made the decision to migrate your enterprise resource planning solution to the cloud, you have made the first step in transforming how your business operates. Now the key task is to make sure the cloud ERP migration goes smoothly.

In Your definitive guide to Cloud ERP, part 5: How to move on up to Cloud ERP, we take a closer look at some best practices to ensure your company’s platform move works effectively.

Focus on change management

Whether you are migrating an existing ERP to the cloud or implementing ERP for the first time, the need for a comprehensive change management plan is essential. The transformational features of moving to ERP in the cloud are maximized when there are considerations made to the people, processes, and technologies that are involved in existing systems and will be involved with new ones.

A software-as-a-service ERP product in the cloud can have an impact on business processes. Process changes should be identified early in the project and staff should be trained well before go-live. In addition, users will need to be aware of and become comfortable with the new interactions that a cloud ERP offers with others.

Invest in implementation

The implementation team is the heart and soul of any migration project. To have a successful migration, this team, often comprised employees and external consultants, needs the time and resources required. The team needs to have C-level support and decision-making authority, along with the release time from other responsibilities.

Maximize cloud properties

Often companies invest in ERP solutions in order to prepare for anticipated future growth. That’s why a cloud system is such a good investment, with the flexibility necessary to accommodate the present state and the future. Here are some core considerations for companies to factor in a migration:

  • Scalability. The importance of future expansion is one of the cloud’s core advantages. A migration needs to leverage this asset to plan for future capacity.
  • Speed. With multiple ERP modules in play on the web, you want to be sure that data moving into and out of the cloud is optimized for real-time data analysis.
  • Dependability. Your cloud ERP downtime needs to be factored into any migration, to ensure that customers and employees can adapt and prevent the loss of revenue or productivity.

Calculate return on investment

With a cloud ERP investment, you want to ensure accurate ROI calculations. Here are several methods for calculating the ROI of a cloud ERP migration:

  • Divide total benefits by total costs.
  • Divide net profits (calculated by subtracting total costs from total benefits) by total costs.
  • Payback methodology. This practice looks at the length of time to recoup the system costs.

Calculating actual costs includes many factors, including:

  • Purchase and options prices
  • Third-party providers (hardware, consulting, add-ons)
  • Internal resources, including staff time
  • Continuing costs, including staff time and training
  • SaaS licensing fees

Cost calculations for a cloud migration also need to factor in cost savings, such as the reduction in maintenance, management, hardware, and upgrade costs. Other direct benefits to be factored into savings include reduced waste and inventory costs, gains in productivity and throughput, and less overtime and expediting costs.

Cloud ERP

Your cloud ERP implementation team is the key to a smooth transition.

Manage available bandwidth

As the go-live date nears, so too does the demand for additional bandwidth. Often in the planning phases, the assessment of needed bandwidth is underestimated. As more and more components are added, bandwidth and budget are likely to increase.

A failure to account for these needs … which often last until expected transaction performance levels are reached … can detail many aspects of the plan, not the least of which is operational uptime. In addition, a lack of available bandwidth can slow down training and implementation, eroding confidence in employees.

Select the right service plan

Just as a failure to plan for scalability can hinder operations, so can a company’s selection of a service plan. Cloud ERP providers usually offer multiple options, including:

  • Knowledge-only plans. These include only basic support elements such as operational assessment, business analysis, systems research and evaluation, and roadmap development.
  • Core integration packages. These services include comprehensive data mapping, operational actualization, rollout, module or system integration, pre-launch testing, and specific support and maintenance service.
  • Enhanced services options. These advanced options for up-and-running ERPs include Big Data analytics, tailored app development, and business process outsourcing analysis.

Getting the migration right is as essential as selecting the right partners for your cloud ERP. At the NexTec Group, we work with leading ERP providers such as Sage X3 Cloud, Acumatica Cloud, and Microsoft Dynamics 365. NexTec helps manufacturers find and implement the right cloud solutions for their ERP needs. To learn more, download the NexTec Corporate Brochure.