The fact that cloud powered work-from-anywhere was inevitable has been well understood by remote working professionals and organisations for some time now. The benefits that such a way of life and working provided to both the employees and employers were just too many to pass on.
But, no one could have predicted the new era would be ushered in such a sudden manner. Due to the Covid-19 pandemic, 64% of employees are working from home in the US alone. And, while the new work trend is here, it doesn’t come without disadvantages.
52% of people covered in a survey thought their employers needed to invest in new technologies. Another 55% considered lack of face-to-face meeting a big challenge. Consequently, the demand for cloud based productivity apps has gone through the roof!
Even though cloud technologies have matured considerably, adopting them isn’t as easy as adding as many apps to a tech-stack as possible. Disparate apps are inherently incapable of talking to one another, after all.
But, this only means that a proper strategy is missing, not that a best-of-breed approach to technology adoption is wrong. Let’s take a look into how the cloud can help you and why the misconceptions surrounding it are just that – misconceptions.
The Cloud – Affordable, Scalable Advantages for a New Normal
Most companies when faced with a recession usually go for mass lay-offs, as has happened this time too. In fact, 49% companies have laid-off employees or are considering it. But, doing so may be ill-advised for many companies, particularly those in the services sector.
Much of the overhead companies face is directly tied to their operating mechanism. Since many companies prefer to have their IT systems in-house, they are responsible for its upkeep and maintenance, which can cost a lot. Since on-premise systems require large capital expenditures, companies need to have enough cash in hand to operate them.
Now, the cost savings of the cloud are well documented and have been discussed at length. Since you don’t need to invest in infrastructure and people to run it, you can save a lot. Your cloud service provider invests in those and spreads the cost over hundreds or thousands of clients, thereby keeping the price per subscription down.
But just how much savings does the cloud forward?
Numbers vary from 40% to 70% and more. However, most of these are from cloud providers, so they’re in all likelihood, a little optimistic. This is especially true when we consider that cost saving ultimately depends on how a user chooses and implements cloud technologies.
Gartner had found that cloud computing was helping enterprises save around 16% (a more realistic figure). Again, the cloud is certainly capable of helping organizations save more. But, it’s up to the user to figure out the most cost-effective way to operate a cloud based system.
For example, the average utilization rate of hardware in a cloud data center is only around 20%, meaning most companies are paying a LOT for unutilized compute space. This is like buying an energy efficient house, only to leave the lights and heating running unneeded, then wondering why the power bill is higher than advertised.
If companies do struggle with the cloud, then it’s usually because they either choose to go it alone, or, take their service provider’s word at face value with basic research thrown in. This is why having a cloud migration partner who can help you create a strategy and find the best way to implement chosen solution(s) is so important.
The cloud’s cost component is also tied to its scalable nature. In fact, the two are inseparable. The ability to take out features you don’t need and add them back is what makes the cloud so effective in the first place. You have full control over how much resources you want to pay for.
For example, companies with on-premise systems that were hit by the Coronavirus pandemic would’ve had no way to scale down their infrastructure. Since their hardware and software will need to be maintained, they will continue to take a toll on the company’s finances even when idle.
This won’t be a problem with a cloud-based system however. Since most cloud providers use a pay-as-you-go model, a client can simply dial down their investment and wait the disaster out. Once the demand is back, resources can be gradually re-added to the company’s tech stack.
Finally, let’s address the big elephant in the room here – security! As much as 83% of enterprise customers still cite security as their biggest concern vis-a-vis cloud adoption. However, such notions are usually due to a poor understanding of how security works in the cloud.
In point of fact, most cloud systems are far more secure than their on-premise cousins. Since cloud service providers are tasked with managing the security of multiple clients, it’s in their best interest to overinvest in security. Gartner even went on record to state that 99% of all cloud security failures will be the customer’s fault at least thru 2025.
There are quite a number of security features that cloud systems use in various combinations. SkyOne for instance uses AutoSky plugin which has a two step authentication process. Once the user logs in, they are assigned a production client instance. Multiple instances are generated each day and are assigned different IP addresses to keep them safe.
Why Postmodern ERP Provides a Better Option
So far we’ve discussed why moving to the cloud whether it be public or private makes financial and business sense. However, simply buying different cloud technologies and apps can create a challenge of its own. You may end up with massive file duplication, inconsistent versioning, workflow nightmares and huge overhead costs. This is why you need to create a well thought-out foundation before investing in a tech-stack. A postmodern ERP helps you do just that.
While postmodern ERP is considered the successor to monolithic ERP, fact is it’s more of a strategy than something as concrete. It utilizes a layered approach that can be built up or scaled down on demand. Furthermore, postmodern architecture also comes integration ready out of the box. More on this later.
A basic postmodern implementation consists of three systems –
An Agile System of Records (SoR): This is the foundation of any ERP. The SoR serves as a single source of information for all the applications that an ERP system consists of. Every ERP software is built on a SoR.
However, while the SoR in monolithic systems is tasked with keeping all the applications on the same page, a SoR in an agile, postmodern system is designed to adapt to changing requirements.
A System of Differentiation (SoD): This layer consists of industry-specific applications that enable the enterprise to exercise its competitive advantage. These apps can either be sourced or developed inhouse.
A System of Innovation (SoI): This is the top most layer of a postmodern setup and consists of applications utilized to test new theories and technologies. These apps are typically used in agile workflows and have a fairly short shelf-life.
What advantage does this sort of a setup present?
Firstly, you only need a basic SoR in place to get started. The systems of differentiation and innovation can be built in a piecemeal fashion using best-of-breed applications. This offers a massive advantage over monolithic ERP too. You are no longer bound by a monolithic ERP’s modules which may or may not be optimal for your workflows and culture.
Also, the entire system can be hosted on a public, private or hybrid cloud setup. You can for instance, have your System of Records and Differentiation on a private cloud and keep your less crucial apps in a more affordable public cloud. Alternatively, you can host the entire setup on a public cloud as well.
Even so, the main challenge of postmodern isn’t moving to the cloud, it’s building a working system on top of the SoR. Since, each postmodern system is built to a client’s specifications, each app has to be manually integrated with every other.
Good integration is also crucial since updates made to one app can have a ripple effect down the entire value chain. But, this is precisely where a postmodern strategy excels. A postmodern provider’s core offerings aren’t apps or modules as would be in the case of a monolithic ERP provider, rather it’s integration skills.
The advantage of a well thought-out postmodern strategy speaks for itself. You can freely opt for whichever apps you think will help you achieve your goals. Your team is no longer bound by a ERP provider’s workflow vision and needn’t waste time adapting to it.
Your postmodern service provider will take care of integrating all your selected apps into one cohesive whole so that it works as a system. In other words, you can enjoy enhanced productivity and reduced costs of the cloud, without the integration nightmares it usually presents by adopting a postmodern approach.
Don’t wait, the time to go for the cloud is now! Get in touch with us and let’s get the ball rolling.