Why Businesses Are Migrating From ERP to Cloud

Jul 26,2021 by Manoj Yadav

Statistically, Enterprise Resource Planning (ERP) constitutes the largest segment amongst business management software that enables organizations to manage a swathe of operations like product planning, supply chain management, manufacturing, and service delivery. ERP enables organizations to automate their processes, and provide an insight into each aspect of their business.

For the past few years, companies are struggling with intricate ERP customizations, particularly, software up gradation. In fact, implementing customization is a Herculean task, which forces many to stay with their outdated software. Indeed, companies, sticking to the applications of pre-digital age, are not competent enough to outmaneuver their counterparts.

Cloud to the Rescue!

Today, companies are moving from ERP to cloud-based platforms. However, the safety of business data on cloud is a matter of debate. Other major concerns associated with cloud adoption are – its actual benefits and success rate.

According to a study, conducted by Gartner, “Different models of on-site software licenses count on more than half of newly installed software applications.

In many scenarios, cloud-based systems prove successful in eliminating hefty upfront costs, making reimplementation of cloud ERP much easier than carrying out any on-premise upgrade.

Let us understand how cloud ERP can add value to your business lifecycle:

Costs: Instead of demanding hefty upfront costs, cloud-enabled ERP implementations are based on a subscription model, which includes the cost for hosting and support. Thus, the costs allied to implementation go down when compared to conventional up gradation. Cloud Hosting service providers manage and maintain a data center migration facility that supports adjustment in subscription with respect to changing organizational needs. By moving ERP to Cloud, businesses can handle intricate software and hardware management activities – right from software patching to upgrades and system backup to system monitoring.

Transferring all such responsibilities to a cloud service provider enables them to shrink the size of their IT support and free up their resources to focus on their important business aspects.

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Fast Deployment: One of the major issues that system integrators and vendors encounter with in-house ERP systems is – customizing and configuring existing templates as per the company’s standards. This implementation can take months of time and, sometimes, even years of time. Herein, cloud-based ERP solutions provide a standard configuration with limited tweaking functionalities that meet the demand of every business type. This, in turn, makes the deployment process super-fast while taking care of critical needs of a business. Unlike in-house ERP systems that involve complex implementations, cloud ERP enables companies to configure new business functionalities speedily.


Service providers are including new ways that can help organizations to add software and functions, quickly, in an ideal time limit. There are vendors, who provide custom-built applications for analytics, finance management, and collaboration. This makes cloud-enabled ERP solutions a befitting option for companies, as they have been evolved to meet a changing competitive environment.

Varied businesses approach to ERP Cloud

A number of corporate entities, including proprietary firms, have observed that maintaining/updating ERP solutions and underlying hardware take up the precious time of their IT team, refraining them from shouldering new responsibilities. At the same time, the need for avant-garde tools has also increased to support the transforming business processes.

Some organizations are gearing up for cloud, to converge multiple ERP systems into one centralized platform.

A number of companies are adopting cloud to move their personal ERP solutions, such as budgeting, planning, and procure-to-pay.
Few companies are choosing cloud to move their complete portfolio of software solutions, such as Human Capital Management (HCM).

However, it is important to decide your business goals strategically, to make the most out of your ERP investment. Your focused approach will guide you throughout the process.

The below points will help the organizations that are planning to move ERP functions to the cloud:

  • Do not rush to carry out ERP migration of entire company at one go. At first, implement it to some processes only, so that it starts giving you a complete insight into the accounts. It will help you regulate the flow of data. Once the implantation to the subsidiary proves successful, you can roll out holistically.
  • It is important to understand that many organizations are moving to hybrid cloud computing model. Out of which more than 70% organizations admit that choosing hybrid cloud was their best decision, says a research. After migrating their business processes to cloud, they were able to cut back IT complexities, performance, and security issues.
  • Understand that a cloud powered ERP works with other systems and does not exist in a vacuum. That is the reason why, it is of immense necessity to regulate the source data and put stringent governance and compliance policies across all systems. This, in turn, will ensure smooth business functioning.
  • To make the most out of your ERP cloud investment, it is important that your business processes are properly aligned with the cloud software capabilities. Also, if up gradations are needed, they should quickly accept that.
  • A hybrid cloud is a combination of multiple cloud platforms, such as public cloud and private cloud. It allows you to store sensitive data on private cloud and lower the number of files on public cloud.
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Last but not the least, it is important to crosscheck the capabilities of a service provider before you sign up for their services. A service provider – that has a rich domain expertise and that supports a range of alternatives, like financial, project portfolio management, process management, and supply chain management – can ensure seamless integration and business processing.

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