The bountiful benefits Cloud ERP affords small-midsize and enterprise businesses are well documented. Whether app scalability, low implementation costs, end-to-end visibility with real-time data across all business touchpoints, universal accessibility (across any device and anywhere), or less spent maintaining on-premises infrastructure.
The global adoption of cloud computing means cloud ERPs have become the go-to for supercharging the back office of many a business on their way to better performance and even more profitability.
To boot, cloud computing (with particular emphasis on Software program as a Service or SaaS) has eased the process of acquiring Cloud ERP seamless, without, of course, the fat serving of deployment bottlenecks and a side of pent-up up-front expenses that is so often the norm.
With this ground-breaking wave of opportunity comes winners and losers. Losers being, well, hosted legacy ERP system providers who are reeling from a mass exodus of clients who are now looking to leap Cloud ERP.
To counteract their diminishing relevance and in response to the market pressure, most of these providers now pass off their hosted legacy ERP solutions as Cloud ERP in a dubious move now known as cloud-washing.
This tosses the question, “How do I crack the code on how to identify and end up purchasing only real Cloud ERP solutions?” up in the air. Here at Zcom Solutions, we’ve pretty much made it our life’s mission to draw up the litmus test. First on the chopping block is the pivotal question: what is cloud-washing?
What is Cloud-washing?
As earlier hinted, the market opportunity ushered in by cloud computing means most ERP vendors are under pressure to offer cloud ERP solutions to play catch up.
To achieve this, some vendors embark on what is called “cloud-washing” — a way of branding their solutions as Cloud ERP, when indeed, it’s not. It’s a mere legacy ERP software hosted on third-party company servers, or theirs.
Another mutation of cloud-washing occurs where legacy ERP providers simply tuck a few cloud apps into their systems or try to develop cloud apps that don’t quite match up to real Cloud ERP in terms of functionality and the business outcomes they help foster.
Factually speaking, both native (real) Cloud ERP systems and cloud-washed ERP systems both eliminate the need for business owners to purchase and periodically maintain their servers. Which makes it easy to fall prey to this marketing sham.
Resultantly, many companies — unbeknownst to them — are still running legal ERP systems. Albeit they might later find that these systems neither fare better than their old setup nor live up to the promise of real cloud ERP.
Is your ERP solution cloud-washed (or Real?)
There are a few tell-tale signs of cloud-washed ERP solutions that make it pale in comparison to real Cloud ERP solutions. A good starting point is the definition of a true cloud computing system given by the U.S. National Institute of Standards and Technology (NIST).
According to NIST, “cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”
As we can glean from their expert opinion, the five hallmarks of true cloud computing hover around on-demand self-service, broad network access, resource pooling, rapid elasticity or expansion, and measured service.
Now, if you’re a company looking to make the long-overdue leap from on-premises to cloud ERP system, or you’re vetting your cloud ERP system for authenticity, it’s not rocket science — your Cloud ERP system evaluation should be carried out using these aforementioned metrics.
One of the promises of real Cloud ERP is the ability to pool resources to the benefit of multiple customers with the aid of a multitenant architecture which could be at the app layer (like in the SaaS model) or infrastructure layer. Real Cloud ERPs wholly fulfill this requirement, so the exact physical location of the computing system is unknown.
On the other hand, it is characteristic of counterfeit Cloud ERPs to host ERP solutions on virtual servers or Azure/AWS or deploy resources on a ‘per-customer’ basis altogether in rather brazen cases of counterfeit Cloud ERP solutions.
The multitenant capabilities of real cloud EPR systems offer companies the flexibility of customizing and integrating other apps, fully on-demand, and for their own customer-specific/industry-specific needs.
Hosted ERP systems? Not quite. Companies have to lodge specific requests to their ERP vendors to configure systems to implement changes or add new features, which can be a bottleneck in implementation.
Moreover, Cloud-washed legacy ERPs are written by their vendors with the use of coding languages that are far from basic and increasingly becoming a thing of the past. Flowing from this, customizing them to suit company needs may not only be harder but also more expensive considering the high cost of hiring scarce, skilled developers.
On the flip side, real Cloud ERP vendors use HTML and other popular coding languages to write their ERP systems. Agility remains one core promise of efficient, real ERP cloud systems. Thusly, anything short of this should set off alarm bells.
Is your Cloud EPR system truly scalable? The inability of hosted EPR system to provide scalability is a costly drawback in a fast-paced global economy where abrupt changes in customer demand are the norm, not the exception.
Real EPR Cloud systems can immediately respond to surges in data flow or transaction volume without companies needing to nudge ERP providers (by way of a change order) to make provisions for additional resources or fewer resources than they currently use.
They integrate ERP/finance, CRM, eCommerce, inventory, and other systems into one single source of truth. Most real cloud ERPs also provide industry-leading pre-configured bundles and customizable dashboards with a wide range of viewing choices and full user permission control.
If you find that you need to make plans for changes in your computing resources, whether scaling up or scaling down, it’s very likely that you’ve been sold a pup, which is most definitely not a real ERP cloud system.
Broad network access
Real Cloud EPR solutions are easily accessible on any device and anywhere over a network that equips state-of-the-art protocols that facilitate use within a broad array of devices. So, as long as the user is an authorized user and the device is similarly authorized, the EPR system can be accessed (regardless of the device.)
Hosted legacy ERP systems having much older, obsolete technologies may limit the options available to companies when it comes to accessibility. In extreme cases, accessing these ERP systems may mean having to explore channels like Desktop Virtualization like Citrix or Microsoft Remote Desktop)
Overall, Cloud-washed legacy systems fall short of the promise of broad network access as the IT staff must have some sort of specialist software on their device to gain access. Absolute bummer.
Cloud EPR systems should give companies a quantum of control over the number of computing resources. It all starts with control, optimization, reportage, and accurate reportage so they have an eye on the applicable expenses they may incur.
The functionality of measured service automatically means that Real Cloud EPR systems are billed on a pay-as-you-use basis, unlike cloud-washed EPRs, which are fixed in their payment structure, usually for a ‘contract’ term. So, companies cannot scale up or pull back on their expenses based on their actual consumption of computing resources.
Calling all small-midsize and enterprise company executives. Let’s face it — cloud computing has become as ubiquitous as the cloud itself (forgive the pun.) Thus, the likelihood of legacy client-server EPR software being masqueraded as a real EPR cloud solution is not on the increase.
When making your purchase decision, it shouldn’t be enough that an ERP provide slaps the ‘cloud’ label on their solution. Closely examine the ERP system on offer using these points of clarification we have chalked out in this post, and you’re ready to be your very own business’ ERP detective.
And while you’re it, don’t forget to check for user-friendliness. Is it a significantly less expensive option to on-premises ERP? Is it intuitive, easy to use, and swift in its implementation? Is the ‘cloud’ your solutions are going to be deployed on public or private? Is it modular?
You’re highly unlikely to be dealing with an honest-to-goodness cloud ERP vendor if your ERP is based on a collection of various software products obtained from other organizations. And if they charge separately for user licensing and support? The odds are ridiculously stacked against you getting a real cloud ERP solution.
If you are planning to acquire a real ERP Cloud solution today and you’re not sure which vendor to pitch your tent with, give us a ding here to see how we can help.