The first part of this article, Top 10 Learnings in implementing Cloud Based ERP Solutions: – Part 1, discussed five of the learnings from companies that have implemented cloud based ERP solutions. In this second part, we look at five more learnings:
6. Discuss thread-bare the ‘Configuration vs. Customisation” Conundrum
If you could some-how go through the thousands of pre-sales presentations of consultants to clients, this phrase would the most recurring- “It is best practice to keep Customisations to a minimum”. Of course, there are horror stories of projects that ignored this precept, spent hundreds of millions and ended with complex sub-optimal solutions.
SaaS was supposed to solve this problem. Clients would make an informed decision on running their business/processes with Out of the box configurations without any customisations. But what is the real world experience? As one experienced consultant notes ” a client …after implementing a cloud based ERP …they can’t make even minor customisations to suit some core fundamental business process for their industry”
Extreme views, especially on matters technology, are always dangerous. However, a good yard stick we learnt from a client is that “Fundamental business process cannot be subsumed to the writs of technology standardisation”.
7. Be comfortable with Cloud solution ambiguities
One of our favourite questions to decision makers is ” Do you need an “IaaS or PaaS” on a “public, private or hybrid” cloud?” Most of the time, they start “It depends ..” Of course, there are examples of large banks that would answer “All of the above combinations” as their current cloud setup.
And that is the crux of the debate. There are some excellent articles from leading providers like Oracle and SAP that provide a point of view. User Organisations have considered parameters of cost, data control, integration, ease of management etc. to make a decision. That only leads to a starting point. Change in business needs and technology necessitates that this question be evaluated, at least once a year as a part of the organisational technology road map. Mostly you may take “No Further Action” but do evaluate.
8. Plan for Continuous Training
End-users need little / no training to use apps on the iphone/ipad and this is often quoted as the ‘intuitive’ gold standard. Nevertheless a typical ERP end-user does many types of business transactions on a system and will need to be trained and sometimes certified to handle sensitive data. In the on-premise model, organisations control the application of patches / updates. In the SaaS ERP model, the vendor owns this process. This could lead to users suddenly logging on to unfamiliar screens / needing additional data etc. An internal team needs to keep abreast of information updates and product change schedules and define a continuous training plan to ensure that the organisational business processes are aligned.
9. Anticipate Testing Needs to stay and perhaps increase
One of the allures of a SaaS system is the sales pitch of reduced need for testing. Phrases like “pre-configured”, “best practice”, “works out of the box” are freely used and are often true when you implement for a single function or process e.g. Human Resources, Sales. However, as we saw (in point 5 of the first part of this article), most organisations run a mix of ERP and “surround” systems. Even with the best API based interfaces etc, you will find that the costs of regression testing increase over time. One of the evolving areas is the method of primary ownership of master data and the need to manage it outside the core ERP system.
10. Focus on Governance and Controls
The service level agreements (SLA) layout the governance and control parameters that the SaaS provider must deliver and demonstrate to its clients. While this provides a level of comfort, do remember that the CIO/CFO have the final fiduciary responsibilities on the adequacy of these controls. From our experience, clients should pay close attention to
a. Data backup, storage and restore protocols,
b. System performance fine-tuning mechanisms e.g. based on high usage in certain geographical regions / users/ business divisions
c. Data center infrastructure, including perimeter security, of the SaaS provider e.g. System being hosted at a Tier 4 Data Centre.
Summary
Do look at these learnings from the lens of your own experiences and share some of your learnings with us:
1. Develop a thorough Business Case
2. Prepare for the Complexity of Cloud
3. Plan for Increased Investments on Data Security and Privacy
4. Do minimum data migration
5. Remember the “Surround” systems.
6. Discuss thread-bare the ‘Configuration vs Customisation” Conundrum
7. Be comfortable with Cloud solution ambiguities
8. Plan for Continuous Training
9. Anticipate Testing Needs to stay and perhaps increase
10. Focus on Governance and Controls
