Question

When transitioning to cloud-based ERPs, what issues should Chief Information Officers consider?

Answer 1

One of the first issues CIOS should consider while moving to a cloud-based ERP solution is the scalability offered by the solution. When looking at systems that offer a user account based licensing system it is important to ensure that the flexibility offered by a cloud based system ensures that the growing organization is supported over the medium term. It is always challenging to ensure that a system is robust to serve not only the needs on N employees today but also factor in a growth in that number over the next few years and accommodate the increased access and data requirements of such a system.

A second big factor is the ease and convenience of access to the cloud. An enterprise moving to a cloud based ERP is also looking for accessibility of the system from simple access points such as a home or a small office or remote locations with bandwidth constraints. A cloud based ERP should be able to provide for reliable access even in such bandwidth constrained scenarios to be effective over a conventional ERP system.

One of the biggest challenges for CIOs and CISOs (Chief Information Security Officers) in moving ERP systems to the cloud is data and access security. The flexibility of access of a cloud based system comes with loss of control to the extent that data and access security can be compromised any time. The cloud based solution must provide adequate safeguards and ensure confidentiality of data as it moves over the cloud. Access security through VPNs and other modern day technologies will need to be looked at for best results.

Cloud based implementation of ERP isalso known to reduce the extent to which the system can be customized to the needs and context of the organization. The implementation must ensure that no feature that was a standard customization for the organization is lost in the transition, even though it may not be a standard ERP feature.

Cloud based implementations will also come with a different set of compliance and regulatory frameworks to abide by and the CIOs must be apprised of it beforehand and ensure that any additional compliances (e.g data privacy, data localization etc.) for the organization must be handled on priority before the system is live. This is a critical requirement since it involves compliance with local laws and in some cases it may be in geographies where the organization has no physical presence, when matters can become more complex