Information Technology

Selection Of Cloud Based ERP: Key Considerations

__
<p style="text-align: justify;">Software as a Service (SaaS) has opened up a new game-changing/disruptive software delivery model. It has several known advantages such as reduced Cost, increased flexibility and ease of doing business due to the aggressive marketing by SaaS vendors. All of which are difficult to ignore in the pursuit of cost reduction, and agile environment goals. Although this game-changing model eliminates several barriers as well as builds several bridges, one should keep in mind some Key considerations while selecting Cloud based Systems.</p><p style="text-align: justify;"><strong>Key Considerations for anyone deciding about Cloud based systems includes the following:</strong></p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Key+consideration+ERP.PNG" alt="" width="586" height="408" /></p><p style="text-align: justify;"><strong>1. Core Strength Mapping </strong></p><p style="text-align: justify;">It is worth considering that not all the cloud based systems are equally strong across all the areas and may not be the right fit for your organization. Early identification and comparative fit measurement of offered business functions such as back office functions (Finance, Procurement &ndash; Direct &amp; Indirect, Human Resources etc.), Supply Chain Management &amp; Manufacturing Operations offers a good indicator. It is very important to ascertain the actual need of the business and strengths of the SaaS provider. Mapping of real business need and comparative strength of the cloud-based system with a weighting system helps in overall evaluation and selection.</p><p style="text-align: justify;"><strong>2. Flexibility for Customization </strong></p><p style="text-align: justify;">Typical sales talk aside, it is critical to understand the flexibility of cloud based systems for customization for different business functions. It can be accomplished by engaging in detailed discussions about offered possibilities of customization with experts of the SaaS provider. For many Customers, a &ldquo;Cookie-Cutter&rdquo; or out of the box approach may not be feasible for key business functions. This is where single vs. multi- Tenancy Options show important differentiators.</p><p style="text-align: justify;"><strong>3. Ease of Integration</strong></p><p style="text-align: justify;">In an ideal world, everyone would like to start from zero to add new cloud based systems for transformation. However it is important to consider existing system &amp; application landscapes and their need to integrate them with these new cloud based systems. Generally vendors of all the cloud based applications offer integration capabilities. However flexibility, ease of integration as well as Cost of Integration need to be considered.</p><p style="text-align: justify;"><strong>4. Single Vs. Multi-Tenancy Options</strong></p><p style="text-align: justify;">There are several deployment models within Cloud based system ecosystem with varying cost &amp; flexibility models. Single tenancy model offers dedicated software hosting, better flexibility, offers more control but comes with higher cost; whereas multi-tenancy model offers less or flexibility &amp; control for a lower cost. As the Organization evolves, one shouldn&rsquo;t rule out the possibility to change from one model to another during the life cycle of hosted applications. Flexibility offered by SaaS provider within Tenancy options should form one of the critical considerations.</p><p style="text-align: justify;"><strong>5. Disaster Recovery</strong></p><p style="text-align: justify;">Knowledge of robust disaster recovery plans and processes of the SaaS provider plays critical role in gaining confidence in the hosted applications ultimate availability. Prior track record of disaster recovery, hosting locations, geographical coverage, data centers, backup policies, system redundancies should form key confidence-building measures and part of selection criteria.</p><p style="text-align: justify;"><strong>6. Data Security Measures &amp; Protection Compliance</strong></p><p style="text-align: justify;">It is of the utmost importance to verify policies and procedures of a cloud-based system provider before they can be trusted to host business critical data. Data protection &amp; compliance forms a critical legal &amp; regulatory requirement for most of the organizations. Assessing Vendor&rsquo;s capabilities and maturity to meet these data compliance needs can be a deal-breaker. A thorough examination of the SaaS vendor&rsquo;s data security Policies can reveal the comparative differences, which can form part of selection criteria.</p><p style="text-align: justify;"><strong>7. End of Subscription (Price Protection &amp; Data Recovery)</strong></p><p style="text-align: justify;">In a fast-paced and competitive SaaS world, where subscription costs arekept at a minimum to capture broader market share; it is critical to know about the price protection for the duration as well as Renewal cost at the end of subscription period. It is often very difficult to change the SaaS provider after 36 months or 60 months because of challenges of business disruption. It is prudent to understand the Renewal prices and potential M&amp;A flexibilities for the licenses up front.Cost of business data recovery at the end of subscription should also form part of cons ideration, in the event of non-renewal of services.</p><p style="text-align: justify;"><strong>8. SLA Comparison</strong></p><p style="text-align: justify;">Last but not the least, a comparison of several Service Level Agreements (SLAs) offered by different SaaS providers&rsquo; forms a key indicator to select a particular vendor. References and previous history of adherence to SLA commitments and its clear reporting help in building confidence.</p>
KR Expert - Sanjay Choubey