The rapid evolution of the cloud and the possibilities it offers has dramatically changed the landscape of enterprise ERP systems, regardless of company size. The need to perform work from anywhere at any time requires a new approach to the design of modern business management systems, moving away from previous ERP systems tied to local office environments. Teleworking, availability of access to solutions and data from anywhere demand a new approach to solutions to organizations through the cloud.

Brief history of the development of ERP systems

Business management systems, like any other system, have been evolving to adapt to the constant changes that are continuously occurring in their environment. The following is a simple, broad outline of the changes that have occurred over the past decades:
  • 1960s and 1970s: mainframe computing.
  • 1980s: Client/Server Computing
  • 1990s: Internet computing. First locally installed ERPS to manage business processes. These are the first generation ERPs
  • 2000s: Service-oriented architectures with large and costly implementations.
  • Decade 2010- 2020: Cloud solutions, mobile, social, analytics. Digital technologies change the way users interact with applications. They are the second generation ERPs
Symptoms of the need to adopt ERP in the cloud

While 1st generation (on-premise) ERP systems provide power for most business processes, adaptation to technological changes and changes in the way of thinking and current of its users require, regardless of the size of the company, the change to ERP 2nd generation.

There are 3 keys that will inevitably show us the need for this change:

1 - Efficiency in the company's operations. It becomes necessary to work in an environment of shared services and the previous ERP does not facilitate it.

2 - Digital transformation. The open and ubiquitous digital technology makes users demand a level of collaboration and ease of exchanges that the previous ERP cannot offer. Real-time analysis from different locations, social collaboration tools, etc.

3 - Growth and trust. The competition of the environment in which the company moves forces its continuous growth which increases the demands in all financial aspects, reporting, new legal compliance ... It is necessary an open ERP that can be adapted. Versatility is one of the characteristics of business management systems in the cloud.

Realizing that the ERP system that currently exists in our company and realizing that it no longer responds to some of these situations is the first step to move to modernize our ERP.

Signs to accelerate the change to an ERP in the cloud

When any of the situations listed below occurs, we should think that it is time to make a change from on-premises ERP to cloud ERP.

Requirements of the current 1st generation ERP: it is becoming obsolete.
  • A deep ERP upgrade is required
  • New hardware is needed. Hardware infrastructure is obsolete and requires significant capital expenditure.
  • Maintenance costs are increasing. Costs associated with maintenance work and services increase significantly on an annual basis.
User dissatisfaction
  • The new digital native users show dissatisfaction with the usability, since it does not appear as other applications oriented to mobility and interconnection between the same users.
  • The current ERP does not respond to the demands of generating more complex reports.
  • The current non-interconnected systems are not able to share data and present inconsistent information.
Adaptability to new requirements and changes
  • New regulatory compliance requirements
  • Business growth
  • New demands from the business environment.
In short, it is necessary to be attentive to the circumstances in which organizations move in order to identify the symptoms that indicate that it is convenient to change to a cloud ERP that facilitates the use and interconnection between all the processes of the company. Ignoring this need can cause serious problems for the viability of companies given the ever-changing environment that exists today and the ever-increasing demands of customers.