Cloud ERP Buying Guide
Updated · Jun 24, 2014
WHAT WE HAVE ON THIS PAGE
We recently published Top Ten Trends in Cloud ERP, and we’ve also looked at how ERP giants like Oracle and SAP are approaching the cloud. Here we follow up with a buying guide that aims to educate users about evaluating solutions, common mistakes to avoid and some of the available cloud ERP products.
Some qualities stand out when it comes to cloud ERP readiness, said Christine Hansen, product marketing manager for Epicor.
“When evaluating whether to buy a Cloud ERP solution, an organization should consider what resources it has available, functional requirements and IT infrastructure,” she said. “Typically, if a company has basic functional requirements, a fast and reliable Internet service, and is considering outsourcing IT support and infrastructure, cloud ERP can be a good fit.”
Cloud ERP Customization, Architecture and More
Experts say you cannot be too inquisitive when it comes to adopting cloud ERP. Eric Kimberling, an analyst at Panorama Consulting Solutions, urges buyers to interrogate potential vendors about service level agreements and average uptimes they see with their customers. More important, what configuration and customization tools are available if you want to change the more generic functionality of the system?
“Some solutions have done a better job than others at making their software more flexible to fit varying needs,” Kimberling said.
Jim McGeever, chief operating officer of cloud ERP provider NetSuite, encourages buyers to ask if the ERP system was built specifically for the cloud and has customizations that carry forward automatically through every upgrade. Further questions include how the vendor guarantees uptime in its SLAs, how it provides transparency into system performance, and how it is certified in terms of security and compliance.
Buyers should also ask vendors about their underlying architecture, McGeever advised, noting that some approaches to cloud ERP are simply a client-server back-end with a Web-based interface tacked on. “Is it based on industry standards like Java and SOAP-based Web services?” he said.
Echoing Kimberling, McGeever said buyers should ensure a cloud ERP solution has a platform for customizing and extending the software to meet specific business needs. It’s also a good idea to inquire about customers of a similar size and in the same industry: Have they had success with the solution?
More Cloud ERP Questions
Noting the growing popularity of mobile ERP, Jean Gea, director of Product Marketing for Acumatica, said buyers might want to ask if employees will have access to ERP data from their mobile devices. It’s also wise to determine the processes involved both in moving to the cloud and away from the cloud, Gea said,
Ned Lilly, CEO of xTuple, suggested that potential cloud ERP buyers should ask the following questions:
- What are the costs, including any hidden ones, associated with moving ERP to the cloud?
- How will using the cloud affect my internal IT?
- Can I access and move my ERP data any time?
- Who “owns” my data?
- Will using ERP in the cloud affect my other software systems?
- If the company is global, can everyone access our ERP data in the cloud, even from other countries?
- How easy are cloud ERP upgrades and how are they performed exactly?
Buyers must also ensure that their Internet connections are fast enough and reliable enough to support cloud ERP, Lilly said.
Cloud ERP Vendor Short List
There are many vendors offering some kind of cloud ERP. Here are a few of the better-known candidates.
Epicor ERP is offered in three software-as-a-service (SaaS) editions: Express, Standard and Enterprise. All use the same code as the company’s on-premise ERP offerings. The Express and Standard versions are multi-tenant, meaning all customers share application instances and physical databases. The Enterprise edition, on the other hand, is a single-tenant infrastructure and is priced higher. The Express edition is intended for small companies (less than 10 users) and starts at $400 per user per month. Standard and Enterprise pricing starts at $2,500 per month.
NetSuite was one of the earliest players in cloud ERP. It provides a full suite of applications to run a business, spanning financials/ERP, CRM, e-commerce, order management and professional services automation, with industry-specific functionality for software/Internet companies, wholesale distribution, advertising and digital marketing, media and publishing, financial services, healthcare, nonprofit, retail, manufacturing, IT services, professional services, consulting, energy and education. Business Intelligence (BI) is built in. Pricing is done on a per-person subscription basis.
xTuple’s ERP application can be hosted in its own cloud service (which utilizes the Amazon cloud for its primary host and Rackspace for offsite backup), in another public cloud environment or in an on-site private cloud installation. Pricing is available online. The company tends to focus on the mid-market ERP space. It comes with integrated CRM, and according to Lilly, the CEO, it has deep roots in make-to-order, make-to-stock and mixed-mode manufacturing, as well as distribution markets.
The free and open source xTuple PostBooks is the core of the application. It includes accounting, CRM, sales, purchasing and light inventory control. Commercial editions add greater and more industry-specific functionality. xTuple Distribution, for example, adds multi-location capabilities, lot and serial control, drop ship and returns management.
Acumatica provides customizable, cloud-based ERP applications for small and midsized businesses. It includes financial management, distribution, CRM and project accounting suites. Deployment options are on-premises, hosted or SaaS, and the ability to switch between them. Instead of charging per user, Acumatica includes unlimited users, and charges according to usage. Pricing information is available.
Infor CloudSuite is aimed at verticals like the automotive and hospitality industries. It runs on the Amazon Web Services (AWS) cloud. This year the company plans to roll out further cloud ERP suites for automotive, aerospace and defense, hospitality and corporate (a core financials and human capital management application). Analytics and developer tools are included in CloudSuite.
Cloud ERP Success Factors
Of course, there are several other cloud ERP offerings which are good candidates to consider. Infinitely Virtual, Plex and Kenandy are notable examples. Whatever system you choose, beware of one important factor – paying for the moon and using a molehill. Adam Stern of Infinitely Virtual sees this sin of omission time and time again.
“Typically, small and midsize business users don’t fully understand the ERP system’s functionality and core capabilities, so they miss opportunities to automate certain business processes,” he said. “They can compensate by providing the appropriate personnel, along with sufficient product training by experienced trainers who have actually installed real-world ERP applications.
Bottom line: As with more traditional ERP, an assessment of the procedures used to program and manage the data, along with the associated workflows to capture data, must factor into a successful cloud ERP implementation. And it’s important to consider how the system will affect employees. ERP projects can fail if workers do not like the new system.
“Companies must give their employees a thorough grounding in the system – not simply how it works at a high level, but what it means to the organization and why their active support is essential both to their success and to the profitability of business,” Stern advised.
Drew Robb is a freelance writer specializing in technology and engineering. Currently living in Florida, he is originally from Scotland, where he received a degree in geology and geography from the University of Strathclyde. He is the author of Server Disk Management in a Windows Environment (CRC Press).
Drew Robb is a writer who has been writing about IT, engineering, and other topics. Originating from Scotland, he currently resides in Florida. Highly skilled in rapid prototyping innovative and reliable systems. He has been an editor and professional writer full-time for more than 20 years. He works as a freelancer at Enterprise Apps Today, CIO Insight and other IT publications. He is also an editor-in chief of an international engineering journal. He enjoys solving data problems and learning abstractions that will allow for better infrastructure.