Cloud Deployment Options & Basic Steps to Implement Cloud Based ERP
In part one of this two-post series, we described the basic definition and benefits of the cloud. Now, we’ll explore the available options for deploying cloud-based solutions and the basic steps for implementing cloud ERP.
5 ERP Operating Environments
When it comes to the cloud, one option does not suit every company. A good cloud ERP provider will be agnostic about operating environments, working closely with you to analyze your needs, consider all available deployment options, and implement the best one for you. As a general rule, operating costs for the company decrease as the proportion of operational components managed by the cloud solutions provider increases.
Multiple factors will inform which operating environment or cloud type can or should be implemented for any business, including available capital and time, operating costs, types of user groups and their distribution, degree of control and influence over the application, customization requirements, and more. Obviously, the objectives and individual requirements of each company will determine the suitability of different operating environments. Let’s look at what options are available:
1. On Premise
In this model, companies run their applications (for example, cloud ERP) on servers in their own data centers located on the company premises, or in a "private cloud" – both under their own direct control. The software can either be purchased or leased for a fee. In on-premise scenarios, the acquisition and operation of servers and storage, as well as the maintenance of software and hardware, are in the company's own hands.
On-premise solutions generally offer, and companies generally take advantage of, the ability to orient the software to company-specific requirements. In the past, on-premise was the most common approach to delivering and implementing business software, but that's been changing drastically over the past several years.
2. Public Cloud
In this model, IT resources are made available online by an external service provider. For example, companies lease the ERP system with the associated licenses and pay usage fees for the use of specific functional areas depending on their degree of use. IT resources such as servers or applications are available over the internet (not via company data centers). Companies can flexibly reserve, use, and release these public cloud resources via their cloud provider as they require. The business thus shifts IT administration to the cloud provider.
Cloud operators generally achieve economies of scale, which can be passed on to the client companies in the form of cost advantages
Software from the public cloud is primarily a standardized solution that is shared equally between multiple users – thanks to dynamic management and the virtualization of resources. As a result, cloud operators generally achieve economies of scale, which can be passed on to the client companies in the form of cost advantages.
3. Private Cloud
A cloud environment dedicated to a specific organization and accessible only to its employees. This cloud platform can be hosted and managed internally (using cloud technologies at corporate data centers) or by third parties. This type of cloud computing delivers similar advantages to a public cloud, including scalability and self-service, but through a proprietary (privately-owned) architecture.
4. Hybrid Cloud
The hybrid scenario combines the on-premise and public cloud operating models. Companies continue to operate business-critical applications and applications that, for example, have very specific requirements or technical limitations, under their own control – in their own data centers or in a private Cloud.
Cloud software can alleviate the difficulties companies face when trying to overcome the limitations of their internal IT
Simultaneously, other applications or application components access IT resources from public clouds. Terms such as "bimodal IT," which blends traditional and agile IT, are often used in conjunction with this hybrid approach.
5. Full Cloud
This operating model envisions that the entire infrastructure, applications and data are completely in the cloud. For small and midsize companies, who often only have minimal personnel, time and financial resources available to handle their IT, the advantages are clear: the necessary IT infrastructure, including hardware and software, is delivered, administered and maintained by one provider.
Users access the system over the internet using a browser. This alleviates the difficulties companies face when trying to overcome the limitations of their internal IT. They can leverage a powerful ERP system and other add-on services and focus on their core business, innovation, or the optimization of their business processes.
10 Basic Steps to Implement a Cloud ERP
Cloud ERP can close the gap between where you are now and where you want to be in the future (a place of agility). Begin by finding a trusted Cloud ERP provider with the expertise and experience you need. Here are a few initial steps to consider:
- Start by checking the technical requirements for using the Cloud (for example, does your company have a sufficient internet connection?)
- Analyze your existing software and hardware, IT workflows, and their performance.
- Work with your IT and business leaders to establish a well-thought-out concept for a sustainable target architecture.
- Create a cost–benefit analysis that takes into account the users, the function range, the costs, and the expected savings potential.
- Define your core Cloud strategy, with usability in mind, to ensure the Cloud implementation is in line with your business goals.
- Perform due diligence, in partnership with your provider, to decide which deployment model (see the descriptions above) meets your expectations.
- Have your IT and technical departments work together to analyze how best to meet their diverse requirements (i.e., users need services that deliver the highest levels of daily efficiency and productivity, while IT departments focus on providing services with the highest level of transparency, security, cost control, and compliance). Analyzing your requirements will help you determine the type of services as well as their scope.
- Adopt a holistic approach to security solutions: tool sets and services must protect both infrastructures – on-premise and cloud – and can't stop at the boundaries of their corresponding infrastructure or architecture. The security concepts should also extend from the back end to the users' end devices.
- Research which cloud services can best serve your analyzed, business-specific requirements. Once you determine your vendor, work with them to develop a realistic roadmap for implementation. Define and communicate roles and responsibilities in advance.
- Staff your cloud project with people who have the necessary expertise: they should have in-depth knowledge of legal and technical aspects, performance specifications, integration, compliance, and security.
This two-part series, “Cloud ERP 101,” is a good place to begin understanding the full benefits the Cloud can offer you. Now that you have some of the basics down, and have an accessible roadmap, are you ready to take the next steps to implement Cloud ERP?