Over the last several years, ERP vendors have doubled-down on their investments in cloud and SaaS solutions. However, it’s not the right option for everyone.
To be sure, cloud and SaaS ERP systems adoption has steadily increased over the last several years – up until last year, when cloud adoption actually decreased (download our annual ERP Report for specific data points). Still, on-premise deployments still represent the most common deployment models.
This is the first time in my career where I can recall each of the major vendors offering brand new flagship products, with very little track record or client success stories to get potential buyers comfortable. SAP is pushing SAP S/4HANA, while Oracle is pushing its Oracle Cloud solution and Microsoft Dynamics is all-in on Microsoft Dynamics 365. Even Infor is pushing its CloudSuite solution as its flagship solution.
Just because SaaS or cloud solutions are the most profitable for software vendors, however, doesn’t mean that it’s the best option for you. It also doesn’t mean that it needs to be a binary, mutually exclusive decision.
Here are five simple steps to ensure you are choosing wisely among your deployment options:
1. Educate Yourself on the Pros, Cons, Risks, and Tradeoffs of Each Solution
No matter which route you go, there will be risks and tradeoffs. No solution is perfect. For example, SaaS and cloud solutions can be easier to deploy from a pure technology perspective, but it can also limit your flexibility. Choosing the right solution requires you to prioritize your objectives and assess the pros and cons of your options against those objectives.
2. Recognize that Software Sales Reps are Biased
Sales reps and vendors are always biased to some degree – a reason why independent ERP consultants such as those at Panorama thrive – but this has never been truer than it is today. Not only are sales reps more likely to promote their own suite of products, but there are biases even within their own suite of products.
I’ve heard several sales reps say that their cloud solutions are the only ones being supported going forward, but this is based on self-interest rather than truth or reality. Several vendors, value-added resellers, and system integrators are compensating their sales reps much more heavily for SaaS and cloud solutions, not because it’s the best for customers, but because it’s the most profitable to the vendors. It is important to recognize these biases and take sales messaging with a grain of salt.
SAP vs. Oracle Case Study
SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.
3. Avoid Being Backed into a Corner by Seeking out Independent Consultants and Alternative System Integrators
Even though certain vendor and VAR sales reps may tell you that only one of their solutions is viable, there are always alternatives. For example, we recently assessed a client’s needs and found that Oracle eBusiness Suite was a better fit than Oracle Cloud – even though that recommendation ran counter to Oracle’s sales messaging. We’ve seen similar disconnects recently with SAP, Microsoft, and Infor as well.
But, there are always way to acquire the software you want, even if your first try doesn’t work. We work with a host of system integrators and VARs that still sell and support solutions such as JD Edwards, Microsoft Dynamics on premise, Infor Syteline, and other non-cloud solutions. These are all viable solutions, and even though vendors won’t always admit it, they have ten to twenty year roadmaps for some of these solutions due to the large install bases. Contact Panorama to find out some of the most viable non-cloud solutions and the best system integrators or resellers for each.
4. Consider Hybrid Options
Hybrid options are becoming more viable as organizations realize that cloud versus on-premise isn’t an all-or-nothing proposition. Call it two-tier, post-modern ERP, best of breed, or whatever you’d like, but the point is that there is a lot of flexibility in how systems are deployed.
For example, some organizations find that a traditional, on-premise ERP system is appropriate for back-office functions such as finance, inventory management, and other master data. On the other hand, they may find that point solutions such as Salesforce CRM or Workday HCM systems are ideal for other functions. It’s important to consider all of your options and take a technology-agnostic approach to defining your digital and IT strategy.
5. Don’t Start Without a Solid Digital, ERP, and IT Strategy
Every decision you make should be made in the context of an overarching digital, ERP, and IT strategy rather than in a vacuum. Be sure to take the time to define your strategy up front, consider your alternatives, weight the risks and tradeoffs, build a business case, define a business plan, and incorporate other aspects of a successful strategy. Your decisions will be much easier when made in the context of your higher-level strategy and plan.
If you do these five things, you will be much more likely to find the right cloud, SaaS, and/or on-premise solution(s) that best fit your needs.