iStock_000020614256MediumA low initial investment and a relatively easy deployment make cloud ERP software attractive to a variety of organizations. From large enterprises to small start-ups, the cloud reigns supreme for many. While the benefits are numerous, cloud ERP still has its limitations and is not right for every organization. If your organization does decide to implement cloud ERP software, you will not realize business benefits without effort – and without independent, vendor-agnostic guidance.

Cloud ERP software is less flexible than on-premise software which can mean fewer options when it comes to customization. Not only is cloud ERP somewhat inflexible, but it can be challenging to implement for organizations lacking the necessary expertise and resources.

Following are four common missteps that we have seen organizations make in their attempt to implement cloud ERP software:

1.   Not Understanding the Developer’s Role –When implementing on-premise ERP software, developers are in charge of monitoring and managing applications. In cloud deployments, developers focus more on coding and testing than on system management. Understanding your team’s responsibilities during implementation will result in prevent unforeseen costs down the road.

2.  Selecting the Wrong ERP System – There are a variety of cloud ERP vendors on the market, but not every vendor will suit the needs of your organization, employees and customers. Defining business requirements upfront is essential to selecting the right software. Be sure to develop a solid understanding of each vendor’s data integration processes, data security policy, back-up provisions and disaster recovery processes.

3.   Lacking the Right Skill Sets – Since cloud ERP software is relatively new, many people have yet to develop the skill sets required for integrating and developing multi-tenant systems. This roadblock can be overcome with strategic ERP staffing. Building a knowledgeable project team is essential for ERP success.

4.   Not Understanding Total Cost of Ownership – Initial startup costs tend to be lower for cloud ERP than on-premise software, but in the long run, annual subscription costs can add up. It’s important that CFOs understand the total cost of ownership so they can ensure a high return on investment.

While cloud ERP can be a great fit for many organizations, there are a multitude of mistakes that can lead to ERP failure. Panorama’s independent ERP consultants know what is required for a successful ERP implementation from a technology and business standpoint – including but not limited to IT strategy, organizational change management and business process reengineering.

Learn more by listening to our podcast, A High-Level Lowdown on Cloud ERP.

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