Cloud-based ERP solutions - Migrating data from On-premises to Cloud-based ERP Systems

Has your data ever been hacked, or has your IT malfunctioned? Or did your system get compromised and infiltrated, and you lost everything? Storing data on internal servers invites high risk for a company. Then there is the cost of on-premises hardware, the complexity of programming and buying and scaling this software and hardware. The high management and maintenance expenditures are exponential for an on-premises system than for a cloud computing environment when a business grows.

Enterprise Resource Planning (ERP) has become a vital component for the success of modern businesses, helping to manage core operations such as financial management, supply chain management, and human resources. Traditionally, ERP systems have been deployed on-premises, meaning that the software and data are stored and processed on hardware located at the business. However, with the advent of cloud computing, there has been a growing trend toward cloud-based ERP solutions.

Cloud ERP

Enterprise Resource Planning a.k.a. ERP

Enterprise Resource Planning (ERP) is a business management software that integrates various business functions, such as finance, sales, production, and human resources, into a single system. The primary purpose of an ERP system is to provide a centralized platform for managing a company's critical data and processes, enabling organizations to improve efficiency and make informed decisions. Typically, an ERP system has modules for:

accounting;
procurement;
inventory management;
customer relationship management (CRM);
human resources management.

ERP systems are designed to provide real-time visibility into key business metrics and help organizations streamline their operations, reduce costs, and improve overall performance.

Traditional On-Premises ERP solutions

Traditional on-premises ERP solutions are software systems installed on a company's servers and hardware. This type of ERP system requires companies to invest in the necessary:

hardware;
software;
IT infrastructure to run the system in-house.

On-premises ERP systems are typically more expensive than cloud-based ERP solutions, as they require a significant up-front investment in hardware and IT infrastructure.

In addition to the initial costs, companies must allocate resources to manage and maintain the ERP system, including:

software upgrades;
security patches;
backup;
recovery processes.

This can be time-consuming and resource-intensive, leading to increased costs over time. Despite these challenges, on-premises ERP systems remain a popular option for many organizations, particularly those with complex regulatory requirements or strict data security requirements. These systems can offer greater control and customization options than cloud-based ERP solutions and provide a more stable platform for running business-critical processes. However, this comes at the cost of increased infrastructure requirements, ongoing maintenance and support costs, and limited scalability.

Overview of cloud-based ERP solutions

The cloud-based solution is delivered over the internet, eliminating companies' need to maintain their infrastructure and hardware. Cloud-based ERP solutions offer several benefits, including:

reduced IT costs;
increased agility;
scalability;
access to real-time data from any location with an internet connection.

Additionally, the cloud provider is responsible for maintenance, security, and upgrades, allowing businesses to focus on their core operations. Here is a list of some popular cloud-based ERP solutions:

Oracle NetSuite ERP
SAP S/4HANA Cloud
Microsoft Dynamics 365 Business Central
Microsoft Dynamics 365 CRM
Infor CloudSuite

Benefits of cloud-based ERP solutions

There are numerous benefits to using cloud-based ERP solutions, including reduced capital expenditure, increased scalability, and improved security. By leveraging the infrastructure and resources of a cloud provider, businesses can avoid the costs and hassle of deploying and maintaining their hardware.

Scalability:

ERP (Enterprise Resource Planning) systems provide scalability, allowing businesses to manage and automate their core processes as they grow efficiently. With an ERP, businesses can manage their increasing complexity and workload by integrating various functionalities into one unified system, such as accounting, procurement, production, and sales. This leads to the following:

more streamlined and centralized data management;
improved decision-making;
increased efficiency.

Additionally, ERP systems are designed to be scalable, so they can accommodate the changing needs of a growing business and accommodate new users, locations, and processes as they are added.

Accessibility:

ERP systems provide accessibility by centralizing data and making it available to authorized users from any location at any time. This allows for the following:

real-time collaboration and decision-making;
improved communication;
coordination between departments;
reduced manual effort and errors.

With an ERP, all relevant information is stored in one place, making it easier to find and use, leading to increased efficiency and productivity. Additionally, many ERP systems are cloud-based, providing even greater accessibility and the ability to access the system from anywhere with an internet connection.

Cost savings:

ERP systems can lead to cost savings for a business in several ways. By automating and streamlining processes, ERP systems can reduce the following:

manual labour and errors;
leading to increased efficiency;
reduced operating costs;
avoid duplicate data entry;
improve inventory management;
reducing waste;
saving money.

Additionally, ERP systems can provide real-time visibility into the organization's financial performance, allowing for better budgeting and cost management. By centralizing data, an ERP can reduce the need for multiple disparate systems, lowering software and hardware costs and reducing maintenance and support costs. Furthermore, by providing a comprehensive view of a business's operations, an ERP system can help identify areas for improvement and cost reduction, leading to increased competitiveness and profitability over the long term.

Security:

ERP systems provide security by ensuring that sensitive business data is protected and only accessible by authorized users. ERP systems typically have built-in security features, such as:

role-based access controls;
password protection;
data encryption.

This level of security and control is critical for maintaining the integrity and confidentiality of business data and protecting an organization from potential security risks. It aids in guarding against unapproved access and data breaches. By centralizing data, an ERP system also makes it easier to implement a consistent and comprehensive security plan across an organization, reducing the risk of security breaches and protecting sensitive information. Additionally, many ERP systems are hosted in secure, redundant data centres, providing an additional layer of protection for the sensitive data they manage. Moreover, an ERP system can provide an audit trail of changes made to data, making it easier to track who has access to sensitive information and detect any suspicious activity.

Regular updates:

ERP systems typically receive regular updates to add new features and functionality, improve performance, and address security vulnerabilities. These updates help to keep the system current and up to date with the latest technology and business requirements. Having a regularly updated ERP system can provide several benefits, including:

increased efficiency and productivity;
better decision-making capabilities;
stay ahead of changes in the market and industry;
improve their competitiveness;
ensure they remain compliant with regulations.

By receiving regular updates, businesses can also benefit from the latest security and data protection measures, reducing the risk of data breaches and protecting sensitive information. In addition, regular updates can help to fix any technical issues and improve overall system stability, leading to a better user experience and reduced downtime.

Integration:

ERP systems provide integration by connecting various departments and functions within a business, allowing for the flow of information between different areas of the organization. This integration helps to improve the following between departments:

Communication
Coordination
Collaboration

This leads to more informed and consistent decision-making. When an ERP system integrates an organisation's various functions it provides a single source of truth for critical business information. This can eliminate the need for manual data entry, reduce errors and inconsistencies, and improve the accuracy and availability of data. In addition, ERP systems can often be integrated with, or include, other software and systems, such as CRM, e-commerce platforms, and supply chain management systems, providing a comprehensive view of all relevant business information in one place. This integration can streamline processes, reduce manual labour, and improve overall efficiency and productivity.

Real-time data:

ERP systems provide real-time data by giving businesses access to up-to-date information from various departments and functions in real-time. This allows for improved decision-making, quicker response times, and a more accurate view of a business's performance. Real-time access to data enables businesses to make informed decisions based on the most current information available, leading to improved results and increased competitiveness.

Migrating data from on-premises to cloud-based ERP systems

While cloud-based ERP solutions offer many benefits, migrating from an on-premises solution to a cloud-based solution can be a complex and time-consuming process. Migrating data from on-premises to cloud-based ERP systems involves several steps, including data assessment, data cleansing, data mapping, and data migration.

1. Data assessment:

Data assessment is critical in migrating data from on-premises to cloud-based ERP systems. The main objectives of data assessment are to:

Identifying data to be migrated:

This involves reviewing the current on-premises system and identifying which data is relevant to be migrated to the cloud-based ERP system. This may include customer and transaction data, inventory, financial, etc.

Assessing data quality:

This involves evaluating the quality of the data to be migrated, such as completeness, accuracy, and consistency. The assessment should also identify any data discrepancies or inconsistencies that must be addressed before migration.

Identifying data that needs to be cleaned or transformed:

The data needs to be cleaned or transformed to ensure data integrity in the cloud-based system. This involves identifying the data that needs to be cleaned or transformed before migration. This may include outdated data, duplicated data, or data in the wrong format.

Overall, data assessment is essential in the migration process to ensure that the migrated data is relevant, accurate, and ready for use in the cloud-based ERP system.

2. Data cleansing:

Data cleansing, also known as data cleaning, is a critical step in data migration from on-premises to cloud-based ERP systems. The main objectives of data cleansing are:

Removing duplicates:

This involves identifying and removing duplicate records to ensure data accuracy and integrity.

Correcting inaccuracies:

This involves correcting any inaccuracies or inconsistencies in the data, such as incorrect spellings, missing values, or incorrect date formats.

Transforming data:

This involves converting data into a format compatible with the cloud-based ERP system, such as transforming data from one data type to another or converting data from one geographical location to another.

Data cleansing is essential because it helps ensure that the migrated data is accurate and relevant, reducing the risk of errors and improving the overall data quality in the cloud-based ERP system.

3. Data mapping:

Data mapping is critical in migrating data from on-premises to cloud-based ERP systems. The main objectives of data mapping are to:

Determining how data from the on-premises system will be mapped to the cloud-based system:

This involves determining the relationship between the data fields in the on-premises system and the cloud-based system to ensure that the data is mapped correctly.

Identifying fields in the on-premises system:

This involves reviewing the current on-premises system and identifying all relevant data fields that must be migrated to the cloud-based system.

Determining how fields will be mapped to the cloud-based system:

This involves determining the correspondence between data fields in the on-premises and cloud-based systems and mapping them accordingly. This includes mapping data fields such as customer information, transaction data, inventory data, etc.

Data mapping is essential because it ensures that the data is organized and structured correctly in the cloud-based system, improving the accuracy and integrity of the data and reducing the risk of errors during migration.

4. Data migration:

The final step in migrating data from on-premises to cloud-based ERP systems is the actual migration of the data. This involves extracting the data from the on-premises system, transforming the data if necessary, and then loading the data into the cloud-based ERP system. The data migration process can be complex and time-consuming, and it is crucial to have a well-defined plan to complete the migration successfully.

Extraction:

Extracting the data from the on-premises system and transferring it to the cloud-based system.

Transformation:

Transforming the data to match the structure and format of the cloud-based system.

Load:

Loading the data into the cloud-based ERP system.

Verification:

Verification of data access aids in guarding against unapproved access and data breaches.

Migrating to Cloud-Based ERP Solutions for Businesses

Migrating data from on-premises to cloud-based ERP systems involves several steps: data assessment, data cleansing, data mapping and final migration. These steps help ensure that the migrated data is accurate, relevant, and ready for use in the cloud-based ERP system. In conclusion, cloud-based ERP solutions offer benefits to businesses, including increased scalability, and cost-effectiveness. Cloud-based ERP systems offer improved data management, increased efficiency, and better team collaboration. Additionally, the cloud-based delivery model allows businesses to access their data anytime, providing them with greater flexibility and mobility.

In summary, when migrating to a cloud-based ERP solution, the migration process can be straightforward with the correct planning and preparation. Businesses should consider the benefits of cloud-based ERP solutions and seek the support of experienced providers to ensure a successful migration process.

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