Moving ERP from On-Premise to the Cloud

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Did you know that Microsoft is re-building their entire organization to become a true Cloud company? And that Oracle and SAP are acquiring one SaaS company after another?

By now, it has become apparent: the Cloud is more than hype. The entire technology industry is shifting toward the Cloud, and this will unavoidably impact businesses with existing ERP installations. Sooner—rather than later—they will have to move ERP to the Cloud.

What does it take to move from on-premise ERP to Cloud ERP? What kinds of business considerations drive (or delay) this decision? Recently, I visited one of SaaSplaza’s largest customers as they were in the process of a Cloud migration and got some answers.

This company, a market leader in business-wear and other clothing, has built a solid (and, depending on your point of view, sometimes fierce) reputation over the years, as it built its organization partly by acquiring competitors throughout the world.

As a consequence of these acquisitions, the company had a patchwork IT environment, built around 19 different ERP systems. One was a clear favorite, however—Microsoft Dynamics NAV.

The decision was recently made to migrate all locations and ERP needs, functions, and data to NAV. And not just to NAV, but Dynamics NAV in the Cloud.

While this decision is fairly simple (after all, the Cloud will not only make it easier to connect the company’s dispersed locations and ERP data, but will also save them money), the actual transition requires a fair amount more.

One challenge is often a “people problem.” Much of a Cloud migration of this scope and magnitude depends on the motivation of local IT leaders at each location, some of them virtually a continent away from HQ. How do you get the local leaders to abandon some or most of the standards they were accustomed to and follow global standards instead?

In this instance, the key to getting and keeping people on-board was to empower existing local teams by making them part of the process. Moving ERP to the global Cloud does not mean entirely saying goodbye to local flavor.

For example, after building a corporate template in NAV, localization would have to done in each country of origin and then uploaded to the cloud, country after country, in a controlled manner, which required leadership at a local level.

And to help support this move, the overall advantages for the company—which are simply too great to be ignored or rejected at any level—were made clear and shared across the enterprise. Most important was detailing the added value a Cloud-based Microsoft Dynamics NAV platform offers by 1) presenting one global standard for financial and business reporting, 2) improving transparency, and 3) improving decision making.

The move to the cloud has taken away the dependency of critical global infrastructure being run locally and independently. It has also enabled the company to more easily enforce global standards, to embrace a pay-per-use model that has made their IT costs more predictable, and to enjoy increased flexibility and ease in scaling.

The results are beyond debate. By moving their on-premise ERP solutions to the Cloud, the company will save around 35% on their current IT budget, and enjoy complete ROI in less than 3 years.

So if you’re considering moving ERP to the Cloud, consider this key issue: understand and—most importantly—share the benefits across your organization. Don’t just say, “Here what we’re doing.” Say, “Here’s WHY we’re doing what we’re doing.”

And embrace local flavor because, in the end, business is all about relationships. Empower as many people as possible. Get buy-in at the local level before you go global.

Moving ERP from many on-premise locations to the Cloud is always easier when it’s a team effort.

(This is the second contribution from Herb Prooy, CEO of SaaSplaza. Check back often as he will be reporting regularly on his experiences working with Microsoft Dynamics ERP partners and customers all over the world. Learn more at

By Herb Prooy, CEO, SaaSplaza

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