Paul Mayne

Director of IT Strategy

Why run my ERP in the Cloud?

The introduction of cloud computing has provided an additional dimension to IT service delivery and radical concepts that challenge the view of the value of on-premise systems. The question of cost is changing the dynamic and rules that govern financial systems. These rules were:

#1 – my business critical data must sit in my data center
#2 – no one can touch my data or my systems or my machines other than my personnel
#3 – nobody can run my financial systems better than I can
#4 – if you disobey any of the 3 you will not be in business very long.

In reality, 10 years ago we had the same rules for email, and now 1 in 5 companies are putting email in the hands of service providers.

The decisions being made about ERP are usually totally driven by the CFO, including the technological choices simply because of the critical nature to the operations of the corporation. However, as the changes in technology are driving the costs of IT higher it is becoming more important to seriously evaluate the options for processing, managing, hosting, maintaining and even application choice.  Also understanding the new data center services for virtualization of processing and storage, big data management and mobility is creating more complex decisions around application purchases. The investment required is significant to reap the benefits of the new technologies and truly provide the ROI to a business.

So as a CIO, how do you provide the latest technology for the lowest cost and in the shortest timeframe? Here in lies the new set of rules:

#1 A Data center is not my strategic asset; data from the enterprise is the most important asset to manage
#2 Service Delivery is not just the responsibility of my staff but combined with partners I can extend my capabilities in an unlimited fashion
#3 Business services for the enterprise is where my team should focus not the basic underlying infrastructure or development or maintenance
#4 Applications critical to the business should be refreshed with the speed of business and technology not become anchors to old models and business

We therefore must consider the value of a solid cloud service provider, with a mature application with highly proficient managed services to comply with the new demands of enterprise performance. The older rules just cannot co-exist in a realistic environment of high competition, lowered capital and even lower margins with an increasing appetite for detailed analysis of information to drive fast moving revenue targets.

One Response to “Why run my ERP in the Cloud?”

  1. Patrick Sullivan says:

    Interesting article, Paul. As more companies embrace the cloud for ERP and other critical business services, it is important not to lose sight how important it is to pick the right service provider to manage your data including how robust their SLA, failover and disaster recovery plans are in case issues are encountered. Any CIO looking to go to the cloud should first take a provider’s contract and have the legal department look into the services provided and determine what additional language must be added to protect the organization. When dealing with the cloud, doing some homework up front can save your company from stormy weather.

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