Moving to a cloud-based ERP: the importance of preparation

  • Posted on April 12, 2017

cloud-based ERP

In November 2016, Microsoft launched Dynamics 365 for Operations, its new cloud-based ERP solution, a complete re-architecting of the Dynamics AX platform that aligns with Microsoft’s cloud first, mobile first strategy. ERP in the cloud can and will offer businesses many advantages. However, it also requires a good preparation and the right choices.

First of all, companies that are considering moving to Dynamics 365 for Operations need to realize the impact of this decision on the internal IT team. IT departments are used to managing a large number of servers that need updates, upgrades, hot fixes and maintenance. All these traditional tasks may no longer be required in the future. Still, this does not mean that all members of the IT department can be sent home. On the contrary. It is all hands on deck because of the major changes the choice for a cloud solution brings along.

Role of IT Governance

Let’s assume that a company has the right IT governance in place for its existing on premise IT infrastructure and all ITIL processes are in place and well-covered. Unfortunately, many of these elements will not apply in a cloud environment. An important difference is the perception of IT. In an on premise ERP environment with its traditional file exchange and EDI or Edifact communication for example, local IT is at the heart of the organization. The IT department knows every nut and bolt. A move to the cloud will change this perception dramatically, as the cloud is much more of an anonymous black box, offering compute power and compute functionality. Therefore, a company needs to work on new forms of IT governance that will cover among others Cloud Security Architecture, Cloud Data Governance, Cloud Discovery (for discovering shadow IT instances), Cloud Service Management and Cloud Global Risk and Compliance (GRC).

Traditional vs New Tasks

In addition to new forms of governance, tasks will change dramatically and new skills will be necessary, preparation is key when considering a move to the cloud. The main challenge is determining who is responsible for what. Traditional tasks, mentioned above, may be replaced by new task that are equally important. For instance, users have to be created and managed, and a wide array of security measures have to be taken and policies enforced. Also, performance must be monitored and if services are down or slow, it is necessary to know which actions to take. In addition, the IT department must determine how it will deal with legacy apps that are not suited for the cloud. And for many companies, compliancy is a major issue. All in all, a lot of matters must be resolved before a move to the cloud can be made. It may be tempting to just ‘click and buy’ services in the cloud, lured by cloud provider’s marketing, but by doing so chances are one has to start over again.

Acting More Agile

With the right preparation and the right choices, it is possible to profit optimally from cloud-based ERP. Dynamics 365 for Operations is a fully integrated solution with Office 365, enabling users to access both productivity and ERP tools from one central portal, anywhere and anytime and with any device. The solution offers a variety of means to ensure secure access. Furthermore, cloud-based ERP provides much more agility and flexibility. A platform can be up and running in weeks instead of months. Updates, patches and fixes are no longer a concern for the IT department. And contrary to common belief, cloud solutions have a higher uptime compared to on premise systems.

Any approach with regard to cloud should be driven by business needs rather than by technology. So how do you tell when your ERP system is ready to move to the cloud? Obvious triggers are:

  • Cost savings – systems that can be provided at a lower cost – so that transition costs can be recovered within 18 months
  • Time to market – when IT needs to support increased agility in highly dynamic markets
  • End of life – systems that need to be replaced soon, or where significant capex re-investment is required are likely candidates
  • Collaboration – systems that will generate more value by being accessible to more users

With your business case in hand, Avanade can help you with an in-depth assessment to map your current environment and the necessary steps to make your transition to the Cloud with Microsoft Dynamics 365.

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