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Jeff Pyden, OmniVue

Top 5 Myths about Microsoft Dynamics ERP in the Cloud


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If your business has researched ERP software options recently, you’ve probably noticed there are many different ways to implement and run the system in your organization.  The more traditional on-premise software implementation is now one option among many, with other choices being SaaS and Managed Hosting models.  Despite economic shifts toward cloud computing and hosting, there are still some misunderstandings about the benefits of these options.

1. Someone Else Owns Your Data
Let’s clarify this prevalent misconception first.  By definition, hosting is not the same as owning. In most cases, your data will be safer with a hosting provider than it is right now. Think of it this way: how many of your employees currently have access to your financial data?  Two?  Twenty?  Who supports the system and runs your backups?  The SaaS or Managed Hosting options remove many of these access points, which means your data will be far more secure.

When entering into an ERP hosting contract, both parties need to sign a Service Level Agreement (SLA), which details the service level guarantees and associated penalties if that service level is not met.  It should never imply that the hosting provider owns your data, and it should clearly state who is responsible for what.  If it doesn’t, you need to find a new partner. 

 2. Disaster Recovery Concerns
How long would it take your company to get up and running after an unforeseen event, and who is backing up your data right now? SaaS and Managed Hosting platforms with built-in disaster recovery and back-up management ensure that you won’t lose time or data, and all you need is an internet connection to access your system from any geographic location.  If your system is only accessed and maintained in-house, even though it may be backed-up to an off-site location, how long will it take to recover your data and be able to use it?   By outsourcing disaster recovery services to trusted professionals, it allows your IT resources to focus on higher value business objectives, instead of operating in reactive mode to the unexpected.

3. Higher Total Cost of Ownership
Sure, the SaaS model is cheaper up front and takes less time to implement than an on-premise system, but won’t I end up paying more in the long run?  The truth is, the total cost of ownership for Microsoft Dynamics GP on-premise will be greater than a SaaS or Managed Hosting model over a 5-year period for most companies.  It is a more cost-effective choice for small, growing businesses because of lower up-front costs and faster implementation.  This allows them to take advantage of sophisticated systems that they otherwise might not be able to afford.  The result is the ability to compete more quickly in the marketplace and have more capital available to reinvest in the business.  It can also delay the need to hire high-cost IT resources, and allows a higher degree of scalability as the organization changes and grows.

4. Less Flexibility
Is a hosted ERP system less flexible than an on-premise system because it is less complicated?  The answer to this depends on your business needs.  If your goal is to make your organization more agile, it’s important to create a hybrid of on-premise, cloud and outsourced managed hosting solutions. The combination of these will increase flexibility and scalability. Trying to build and maintain one giant application architecture is far less flexible than using a combination of models. Concepts like SaaS and Managed Hosting are by no means designed to make the traditional on-premise solutions obsolete.  To further increase your business agility, look for a pure play Dynamics Hosting Partner who can manage your Dynamics ERP system and any interconnected systems, such as CRM or SharePoint.  Many large hosting providers do not specialize in Dynamics and may be less flexible when connecting to other cloud services.

5. System Downtime
Hosted systems are not as reliable as on-premise software. Really? How reliable are your company’s current internal systems?  Accessing hosted MS Dynamics GP via the internet from a secure data center may actually be more dependable.  Most hosted solutions tout a 99.5% network uptime, and can offer cash reimbursement for each minute of downtime. Whereas, if your internal system goes down, all you can do is fire or reprimand your resources, while losing valuable time and money.   

Bottom line
When exploring SaaS (On-Demand), hosted and on-premise models, the only right answer is what makes the most sense for your business.  Enterprises will always have a need for on-premise technology, but the value of these systems is exponentially greater when used together in the cloud.   Don’t limit your organization by not exploring all the options.

By Omnivue, Georgia Microsoft Dynamics GP Partner

One Response to “Top 5 Myths about Microsoft Dynamics ERP in the Cloud”

  1. Hopper Grace says:

    Microsoft Dynamics ERP is Enterprise Resource Planning software primarily geared toward midsize organizations as well as subsidiaries and divisions of larger organizations.It is designed to connect the entire supply chain.