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The definition of cloud software can be as broad as any part of a program running outside your on-premises infrastructure. With the cloud becoming the buzzword it is today, false expectations are generated – which results in a lot of frustration when building your ERP evolution journey.
ERP is typically at the bottom of most organizations' priority lists when it comes to which solutions to move to the cloud first. The reason for this is that we are usually talking about software that was not originally designed to run in the cloud. To add to the complexity of the matter, providers tend to offer few resources for ERP migration initiatives, and almost no tools to differentiate them from simple hosting.
Today, a new generation of ERP software has emerged to take advantage of the cloud. The cloud ERP was designed to exploit the multi-tenant , use remote access via a web interface, integrate with other internet features and be consumed as a service (SaaS).
Like many other technical solutions, the technology behind ERP is not as critical as its implementation. You can find ERPs developed in web native technology that perform very poorly in the cloud. On the other hand, there are ERP solutions built on a client/server architecture that are suited to perform just as well as cloud-native solutions.
multi-tenant architecture , or multi-tenant, is generally transparent to the final consumer who does not need to deal with any of its aspects other than knowing that some or all of its basic resources are shared among multiple clients. The reasons for sharing infrastructure are both technical and economic.
The hardware requirement of a multi-tenant is much less when compared to that of a dedicated solution that requires a complete set of database servers, applications and application servers. According to a recent analysis conducted by Sky.One , the hardware usage of a single tenant solution, on average, corresponds to 40% of its TCO ( Total Cost Of Ownership ). This is considerably higher compared to 5% for multi-tenant . For example, for every $100/users/month paid for a multi-tenant cloud ERP solution, only $5 goes towards infrastructure, resulting in significantly higher margins for cloud-native ERP providers.
Major ERP companies are shifting their client/server solutions from a single tenant multi tenancy architecture . SAP is a good example of software that supports this architecture in its HANA database. This allows its smaller customers to deploy their ERP solutions in multi-tenant , effectively sharing the cost of heavier servers. Thomson Reuters is another great example of sharing your tax solution's application server in the cloud among thousands of customers in a secure and cost-effective way .
Consolidating software deployments speeds and eases software maintenance. tenant scenarios single update affects multiple clients at the same time, ensuring they are running a consolidated, up-to-date version.
Web Access is the modern way to democratize access to software. Multiple operating systems can access the ERP, regardless of screen size or user location. Web development frameworks such as Angular or React are capable of giving users the freedom to access their Windows applications through the cloud (and not just their desktop).
Non-native web applications can now be virtualized and delivered via Web Access. It's what ISVs are doing to deliver their legacy client/server applications to the cloud via web browser access. The cloud application screen is streamed to the browser and the user can operate the original GUI as if the software were installed locally. While running a complex ERP interface on a mobile interface can be challenging, this solution works perfectly to allow generic software running in the cloud access to any operating system on the internet. This functionality is available in Auto.Sky , which also manages the ERP infrastructure in the cloud.
If you install software on customer premises or in a data center and leave it there, you are not delivering any differentiation. As the market continually evolves and rules and regulations change, it is essential that software solutions adapt, ensuring the freedom to constantly update and improve the solution.
The best way to achieve this is open software integration with leading solutions available on the web. Rather than developing and maintaining modules like accounting, e-commerce, banking, and others that don't offer significant differentiation, a postmodern ERP interweaves with third-party solutions. This allows you to focus on your core competence, but still have access to add-ons and integrations that meet your business needs.
Some companies have introduced new subscription licensing models in an attempt to be more like a SaaS offering. A true SaaS solution, however, includes several critical features such as immediate activation, no hardware requirements, scalability and self-management. These aspects pose a significant challenge for a software industry used to selling perpetual licenses, requiring robust hardware and months to implement. Despite the challenges, many ERP vendors have built a solid SaaS model that sets them apart from the rest.
Multi-tenant and web-native solutions Traditional solutions must rely on the significant levels of automation offered by modern cloud providers to deliver a similar experience.
Personalization is still a challenge that all solutions continue to face when entering a new customer. There is a natural compromise between the replicability and scalability of cloud ERP solutions and the level of customization that accommodates these systems. Legacy cloud-adapted ERP solutions still have an advantage when highly customized installations are required.
Regardless of the technology behind your ERP solution, the agility and connectivity provided by cloud ERPs seems to be the right path for any company that wants to keep its back office up to date with the latest innovations in the market. Sky.One Sky.One directly with ISVs and resellers looking to modernize their applications and combine them with cloud native solutions.
This content was produced by SkyOne's team of cloud and digital transformation experts.
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