The IT Buyer’s Guide to Cloud ERP
Cloud applications are usually referred to as Software-as-a-Service (SaaS), while the platform may typically be called Platform-as-a-Service (PaaS). An off-the-shelf cloud ERP solution consists of applications such as accounting, human resources management, asset management, etc. customer relationship management (albeit not all under a single suite) just like its on-premise counterpart and these core applications are a baseline for all ERP implementations. Therefore, expecting these components is natural. However, there is more to managing a cloud ERP than realizing the benefits of the functionality it offers. For example, what about the related IT issues that come with a new ERP package, especially one that is residing somewhere outside your own datacenter? This paper addresses the following topics which are related to that aspect tied to the platform on which the ERP solution is delivered and should be a critical part of your process of choosing your next cloud-based ERP system:
Most enterprises build custom extensions on top of their ERP platforms. In fact, as you know, there is no industrial strength ERP system that would work for every company out of the box. Therefore, customizations are a way of life. Ideally, you as CIO would like to choose a platform with superior extensibility that enables IT resources to easily transfer skills.
Many organizations need to integrate standard ERP functionality with vertical industry applications, their internal legacy applications and other in-house apps. A cloud vendor must support a wide variety of integration options ranging from flat file import/export to dynamic web services and published APIs.
Upgrading an on-premise ERP package can be a multi-year endeavor (and sometimes a career-ending project!). One of the key benefits of SaaS delivery is that upgrades are applied automatically by the vendor in a manner designed to minimize disruption. Of course, it’s not that easy! You need to explore the upgrade process and assess potential landmines and adaptations that may be required.
One of the key roles of an IT department is that of enterprise data “gatekeeper.” It falls on the CIO and possibly the chief security officer’s team to administer ERP access. In choosing a cloud ERP vendor, one needs to verify the strength and flexibility of the security system. For example, does the platform support single sign-on and integration with operating system directories such as Active Directory or LDAP? Can the security model be extended to support custom applications and data integration?
A key factor to evaluate is the level of service promised by the cloud ERP vendor. Outages are costly, especially for customer-facing ecommerce applications. Drill into the vendor’s service-level agreement (SLA), compensation amounts for outages, upgrade schedule and planned downtime, etc.
Many enterprises have augmented their on-premise ERP environments with point solutions specific to their industry, business or target markets. For example such functions as résumé processing, recruiting, tax processing, ecommerce SEO integration and more. CIOs need to verify that third-party applications implemented in their current environment work with a cloud ERP solution, and size up the cloud vendor’s partnerships with ISVs offering complementary applications.
You know that choosing an ERP vendor means making a long term commitment. Tied closely with long term commitment is the need to make sure that the ERP vendor is committed to ongoing innovation. This ensures that you in turn are able to take advantage of the latest and greatest technologies and thus keep pace with your competition.
For each of the topics listed above, this paper provides details on what to look for. Then it provides an in depth example of how one company has taken advantage of the underlying platform to extend native ERP functionality on the NetSuite ERP system to provide industry specific solutions.