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At the time of the survey, 65-70% of businesses used cloud-based solutions for running their operations. Cloud migration is on the increase as an economical alternative to maintaining systems locally; installing hardware in-house may incur extra expenses such as software license fees, backup data storage charges and energy expenses that must also be factored into costs associated with energy bills and energy use.
Security considerations may also drive cloud migration. Maintaining hardware at one location requires powerful firewalls and encryption technology as well as access control experts; cloud services have at least 60% fewer chances for security breaches compared with on-site data hardware.
First, Let's Break Down ERP Cloud Migrations
ERP cloud migrations have seen an upswing as more businesses shift to the cloud to conduct operations post-COVID.
But what exactly constitutes an ERP cloud migration?
What Is ERP?
Enterprise Resource Planning (ERP) refers to a collection of software tools used by businesses to run operations efficiently.
ERP encompasses core processes like project management, accounting and supply chain. Business management software assists companies in setting ambitious goals while working alongside their teams on tasks and tracking financial outcomes for optimal management of the company.
What is ERP Cloud Migration?
Cloud migration refers to moving applications, data, or workflow from an organization onto platforms hosted in the cloud, specifically referring to ERP cloud migration as its implementation within an organization's ERP.
Migrating ERP can take various forms: replacing their current ERP with cloud options or keeping their existing one but running it through a cloud service - both are valid approaches for cloud migration.
Here are two examples of ERP cloud migration examples from companies.
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4 Types of Cloud Migrations
Now is the time to examine four primary cloud ERP migration strategies.
Lift-and-Shift:
This approach works best for companies that have all of their hardware and software stored within their data centers and now want to move their ERP system onto the cloud.
Your business' application that was once running locally would simply be rewritten in the cloud - often considered the fastest and least disruptive method as your company maintains control while moving swiftly onto it. However, long-term savings or improvements might be missed due to shortening transition times, or reduced performance benefits may remain absent with this strategy.
Software-As-A-Service (SaaS):
ERP experts often recommend SaaS solutions as an efficient method for cloud migration. Outsourcing involves outsourcing applications like ERP to providers who specialize in them.
For instance, outsourcing an ERP system such as Microsoft SaaS can relieve IT staff of having to maintain it themselves, instead enabling staff members to focus more on core business activities than system maintenance duties.
Refactoring:
Organizations who refactor their ERP apps using Microsoft Azure as the migration platform do so to replicate current applications on cloud software simultaneously with any new apps created from within Azure; existing apps continue running parallel with any newly deployed services as you slowly transition your on-premise services over.
Refactoring can save both time and money during this transitional phase while gradually transitioning your legacy applications over.
Replatforming:
Large corporations looking to integrate core competencies throughout their organization may benefit from re-platforming.
This process involves changing application code so as to maximize usage within a cloud environment. This method also happens to be one of the hardest ERP cloud migration strategies to implement successfully.
The Top 5 Reasons Businesses Migrate ERP Data to Cloud
Here are several reasons why nonprofits and businesses should consider cloud migration.
- Remote Access: With cloud ERP, you and your colleagues have access from any location with internet access - making mobile work simpler while receiving real-time ERP Migration Solutions project updates in real-time and making home-based work seamless and collaborating while away.
- No Need for Hardware: Cloud migration offers numerous benefits, one being powerlessness. Cloud solutions operate through the Internet without requiring internal hardware or infrastructure, therefore enabling businesses to reduce future capital expenses while freeing up tech teams so they can do other things.
- Automatic Update Capabilities: Cloud migration services often update themselves automatically. Updates arrive swiftly, are non-disruptive, and incur no extra costs - far simpler than manual updating.
- Predictable Costs: Its Microsoft Cloud Services offer subscription plans per user that are charged monthly, making this an economical way of migrating ERP systems.
What Industries Benefit Most From ERP Cloud Migration?
Boyer currently boasts over 400 clients, and this number continues to expand. We are an experienced partner who understands how ERP cloud migration can bring value across industries; our support for multiple industries shows them exactly how an ERP cloud solution could assist them.
Production and Distribution:
Production and distribution companies face unique challenges from globalized competition, fluctuating economic conditions and shorter product cycles compared to their counterparts in other industries.
Microsoft offers integrated software packages which help manufacturers track processes, replace old systems with better ones, find productivity gaps more efficiently, lower inventory costs as well and keep an eye on productivity metrics to measure productivity gaps effectively and track process changes over time.
Financial Services:
Cloud ERP software can provide companies in the financial industry with a significant competitive edge by automating processes.
By choosing our solutions, journal entries can be automatically submitted electronically as payment is established using electronic methods. At the same time, costs can be managed more effectively.
Small-Sized Businesses:
Smaller firms frequently employ spreadsheets to track budgets and enter data. Yet, our consultants will help integrate ledgers, fixed assets, expense reports and receivables through Cloud ERP to streamline services and sales activities - giving smaller firms an early edge against rival businesses.
Non-Profits:
Non-profit organizations must operate transparently. With tight budgets and government requirements a constant concern, staying compliant may prove challenging.
Cloud ERP solutions offer solutions for automating gifting, encumbrances and allocation of funds so donors know exactly where their donations go - keeping donors updated on where their funds have gone to ensure they reach those in need.
Which Organization Should Lead the ERP Cloud Migration Initiative?
Identification of the individual responsible for leading migration efforts when implementing cloud ERP is vitally important to its successful deployment.
An IT administrator or CFO/COO are optimal choices.
The CFO, COO, and CIO
C-level executives are increasingly turning to cloud adoption in their companies in order to expand the scale and return of investment of their operations, particularly in smaller organizations where C-level executives invest heavily.
Cloud ERP software offers small organizations an effective means of cutting costs while improving efficiency.
Management and Financial Controllers
Implement a migration-focused plan and include C-suite executives in discussions regarding its larger scope and objectives.
ERP Cloud Migration Challenges and Solutions
Enterprise Resource Planning systems (ERPs) have long been an indispensable element of business operations, helping organizations manage data efficiently while streamlining ERP Implementation processes.
But as technology changes and expectations change for ERP systems as a result, so have expectations. As technology improves, businesses increasingly migrate their ERPs into the cloud for benefits like scalability and accessibility - however, this comes with its challenges that must be considered before moving ahead with this step - we explore those herein along with ways of overcoming them in this article.
1. Secure Data and Privacy:
Problem: Data security and privacy are two primary concerns when switching to cloud computing for businesses who fear their information won't remain safe while stored there.
Solution: Select a cloud provider with comprehensive security measures such as encryption, access control and audits that meet data protection laws such as GDPR or HIPAA.
2. Legacy System Integration:
The challenge: Many companies possess legacy systems which must be integrated with their cloud-based enterprise resource planning system, making integration an extremely complex and lengthy task.
Solution: Early planning of integration is vital when embarking on any migration. Middleware can serve as an intermediary between legacy systems and cloud ERPs; map out data flow and dependency structures before embarking on this endeavor.
3. Data Migration Complexity:
Challenge: Moving large volumes of data with complex structures between systems can be complex.
Solution: Undertake a data audit in order to ascertain what should be moved and deleted/archived, using migration scripts/tools and verifying data integrity upon migration completion.
4. Downtime and Business continuity:
Problem: Keep business continuity on track by minimizing downtime. Too long a break could disrupt operations and result in financial losses for your organization.
Solution: Plan the migration during non-peak business hours or weekends and implement a contingency plan if unexpected issues arise; to minimize downtime, consider adopting a phased approach.
5. Scalability:
The challenge: As cloud-based ERP systems face rising demands and maintain performance levels, it is imperative they can keep pace.
Solution: Make the transition with ease using a cloud service provider equipped with scalability features, then monitor system performance once the migration has taken place and make necessary changes as necessary.
Improve results further by employing load balancing mechanisms or caching mechanisms.
6. Change Management:
Challenge: Users might hesitate to adopt cloud ERP if they feel pressure to switch from their current on-premise solution.
Solution: Include employees in the planning stages, providing training materials to facilitate their transition.
Cloud-based ERP offers several advantages that should be highlighted, such as increased accessibility and better collaboration.
7. Cost Management:
Challenge: Although cloud ERP offers potential cost savings over time, managing expenses as usage expands can prove tricky.
Solution: Utilize cost management and monitoring tools to keep tabs on cloud expenses, make use of reserved and spot instances to meet predictable workloads, review and optimize resource allocation regularly and regularly reevaluate and adjust as necessary.
8. Vendor Lock-In:
Challenge: Navigating your way around changing cloud providers or switching back to traditional on-premise systems may prove a challenging challenge.
Solution: Prioritize vendor-agnostic solutions when possible and be wary of ecosystem cloud providers; keep sensitive data separate.
Develop exit strategies and ensure data portability are part of any data storage plans you choose.
9. Performance Monitoring and Optimization:
Challenge: To maximize performance and ensure optimal functionality of the cloud infrastructure, it is imperative to monitor and optimize it continuously.
The solution: Utilize powerful tools and techniques for performance monitoring. Analyze usage patterns regularly, identify bottlenecks quickly and optimize configurations as required to maximize efficiency.
10. Regulation and Governance:
Challenge: As part of your cloud-based enterprise resource planning system, it must adhere to both internal policies and industry regulations.
Solution: Implement clear governance policies and compliance frameworks. Conduct regular reviews of your cloud environment to make sure it adheres to both internal and external standards.
11. Resource Management (Resource Management):
Challenge: As usage rises, managing cloud resources like virtual machines and storage can become more challenging to administer.
Solution: Use cloud management and automation tools to optimize resource distribution. Tags can help track costs and resource use accurately.
12. Data Backup and Disaster Recovery:
Problem: Undergoing data backup and recovery in a cloud environment is no easy feat, however.
Solution: Build and test an effective backup and disaster recovery plan using cloud services for backup.
Doing this regularly ensures business continuity and data availability.
13. Network Connectivity:
Problem: Poor network connectivity may create latency or performance issues when accessing ERP cloud systems.
Solution: Make sure your network bandwidth is sufficient, and ensure your cloud infrastructure connects quickly with it for maximum performance.
Consider content delivery networks as another method for optimal results.
14. Monitor and Alert:
Challenge: Monitoring the health and performance of cloud-based ERP systems requires advanced monitoring tools.
Solution: Apply cloud alerting and monitoring solutions to identify problems quickly and proactively.
Set notifications that notify of key events like resource overuse or breaches in security.
15. Vendor Lock-In Mitigation:
Challenge: Resolving vendor lock-in concerns after transitioning between cloud providers is sometimes challenging.
Solution: Containerized tools and Kubernetes orchestration provide a way to abstract cloud infrastructure for portability purposes while decreasing dependence on one cloud provider.
Read More: What are Enterprise Resource Planning (ERP) Systems?
ERP Migration Steps (Your ERP Migration Checklist)
Your ERP migration project should be one of your highest priorities since this marks the moment your ERP system becomes fully functional.
Your ERP implementation project is almost complete. Now, the data migration phase begins; one part of this transition involves moving away from an older ERP system into one more suitable for meeting our goals.
The success of migration depends on much more than data alone: its success also relies on your people and being organized enough to set clear objectives before undertaking its journey.
There can be no room for uncertainty in an effective project. Migrating can present many obstacles; to help overcome them, make use of our six-step ERP Migration Plan as your guide in planning the final ERP steps.
Step 1: Determine Your ERP Needs
Your ERP system's requirements form its cornerstone, and these must all be satisfied at its completion. Your team and you worked tirelessly on crafting these needs over an extended period, meeting face-to-face, by phone and via written correspondence.
Your business has prioritized needs that meet those of both its clients as well as other stakeholders - this foundation must remain intact.
Your plans might also include additional hopes and desires you wanted to accomplish but were optional. These might have been designated "Nice To Have" items.
At the same time, they will benefit you or your company or specific subsets of employees; these "Nice To Haves" may not be necessary.
Your executive team provided crucial assistance, making certain the requirements listed met both immediate and future requirements for migration success.
Without their backing and support, your migration ambitions might quickly fade into history.
Step 2: Plan your ERP Migration
Plan out how you will transition from where you currently are to your desired endpoint, with dates and key milestones so you can monitor progress along the way.
Many steps must be completed, data migration being the initial one.
Data will be essential in populating your new ERP, much of it coming from legacy systems. Each category of information must be treated differently; basic details like tax ID numbers or addresses, often just typed directly in cells, are part of fixed data; supplier and customer names/addresses also form fixed data, so when choosing where they will live within your ERP, it's vitally important that first identify which systems that they reside on before making your selections.
Find all your data elements from your legacy system and create a map showing their relationship between Table 1 of your new system and Table 14 Field 23 from your legacy system.
Decide whether any date formats need changing into something else (i.e., dates in one table may need converting before dates from another table); determine any data validation rules within your new ERP that need adhering or being temporarily suspended during data migration, such as one table must be filled before another or dates in one table must precede dates in another; etc.
Step 3: Communications
Now is an opportune moment to inform all employees involved that your enterprise will migrate from an old ERP system to its replacement and communicate the reasons and goals behind this decision; even though not every user may directly benefit, everyone can still gain from greater profits as an outcome of this endeavor.
What obstacles might users experience throughout it? Who will cover for users during ERP Migration work? Will any benefits accrue before its conclusion? How will members of the public see progress being made on ERP Migration projects as they unfold?
Who are these strangers doing, how can people help, what should individuals do if they do not agree with or understand its direction, will anyone lose their job due to these changes, etc? The communications you are making here are only the first step - now is also time to discuss maintaining excellent communications throughout migration - make an agreement between staff members regarding maintaining good communications throughout.
Step 4: Implementation
Starting the migration. A team should be assigned tasks and be given encouragement and recognition for their hard work.
Fill your ERP system with data from legacy systems, then begin testing basic transactions using teams from across departments. Basic examples might include adding items to inventory and writing cheques. Once these steps have been accomplished, add more complex stages like recognizing liability that needs paying and reconciling bank accounts so the check has cleared successfully.
Each test is graded using an easy status. A transaction could have gone according to plan, although unexpected problems occurred unexpectedly.
When testing ends, any non-green transactions should be investigated further to understand why they failed - getting outside help may help if necessary. At go-live, there should only be a few yellow test results and a few red results, representing either incorrect setup parameters that must be changed, incorrect instructions for making transactions, data migration problems or any issues encountered while performing testing.
It is imperative to understand and solve any problems discovered during this stage quickly. Testing should provide clarity as to any problems discovered during pre-live testing results so as to minimize or fix issues discovered during production go live.
It is imperative that any issues that arise during pre-live testing so as to minimize disruption caused during production when going live.
Step 5: Manage The Transition To A New System
Implementing an ERP can cause immense anxiety amongst your staff, the team responsible for its implementation, as well as your clients and suppliers - it is therefore imperative that everyone affected by its adoption can navigate its changes with ease.
Change can be daunting for individuals seeking to maintain current jobs while planning for future ones, with some individuals finding difficulty adapting.
Others might doubt whether altering an ERP will bring any tangible benefit - leading to even further stress for both the individual and the company.
Step 6: ERP Go-Live Evaluation
The start and end of a migration project are both coming closer. At this stage of work, rest as much as you can after testing and results are positive; all users have completed training; anticipation builds.
Your team has set an exact start time and date for new transactions to begin, with your computer people switching your legacy system into read-only mode a few hours earlier, usually around midnight.
In order to ensure smooth go-live procedures, final data migration needs to take place well in advance and undergo thorough verification by your team once complete.
So it worked because someone entered their transaction first. Wonderful. Unfortunately, people seem to have forgotten everything they learned during training and require assistance as soon as they use the system.
All seems well until soon the team heads home, where they collapse into bed exhausted after another long day's work.
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You Can Also Find Out More About The Conclusion Of This Article
ERP cloud migration offers many benefits to organizations; however, successfully making this journey requires planning and managing various challenges.
Organizations that successfully overcome them may reap increased scalability and flexibility from their ERP systems while Custom ERP Solutions increase business agility.
ERP cloud migration presents its own set of unique challenges. It offers numerous rewards, but in order to successfully transition ERP systems onto the cloud, organizations must address any associated concerns while also employing best practices to achieve seamless transitioning processes.
Achieving successful migration requires careful planning, robust data security measures, and emphasis on user adoption for an exemplary experience.
