You can check-in to the cloud anytime you like – but if you are not careful with your ERP vendor selection – you can never leave. ERP solutions can be a godsend to your company, allowing you to work more efficiently and function more effectively in a competitive business environment, but they’re only beneficial if you select the right solution. One downside of choosing the wrong solution is that you may end up “locked in” to an ERP system that doesn’t fit your needs and you are trapped because the provider has control of your data. Although many cloud ERP solutions are interoperable in some ways, the cloud provider usually uses a proprietary application with its own set of requirements and its own administrative tools that allow the configuration and maintenance of the application. This lack of interoperability allows for vendor lock-in because it becomes difficult to migrate your data to a new ERP solution.
A particular cloud ERP company, we’ll call them “Hotel ERP,” has a bad reputation for vendor lock-in. Customers have complained that they cannot access their data without going through the company’s system, the company offers no out-of-the-box relational data export function and the company charges exorbitant fees for a relational export “option.” In other words, you cannot download all of your company’s information at once. Hotel ERP effectively “owns” it and controls your access. Some customers have paid exorbitant exit fees and have still needed to hire a programmer to create scripts to extract the data in a relational format.
The business disadvantages of this arrangement are easy to see. The lack of flexibility in accessing your data makes it hard – and expensive – for you to switch to a different vendor (one that perhaps grants you easier access to your data). This lack of flexibility also gives Hotel ERP a huge advantage when they are negotiating renewals of contracts. Some disgruntled customers have suggested that Hotel ERP actually uses their system’s inflexibility as a sales tactic.
Another disadvantage is that the security of your data is completely dependent on the ERP provider. If Hotel ERP were to go out of business, you could lose your data, and there is no way you can easily back it up yourself. Hotel ERP does not provide independent customer back up data storage, a lack which should give any potential customer pause. So before you pick your ERP vendor, please do your due diligence and make sure that you and your data can check out of Hotel ERP if you need to switch vendors.
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