We’ve all heard it: The future home of all software is in the cloud. We’re interested, we’re curious, but we’re also hesitant. We wonder if it’s the right thing for us, at this point in time and for our company’s current and future needs. If you’re a Microsoft fan, you already know that the last year of Covid has only increased Microsoft’s insistence of having us all move to the cloud. There have been a number of Microsoft offerings, and there are three primary groups of Microsoft cloud-based ERP available to choose from. Today I want to share some of the thoughts and questions we are hearing from clients and partners all across the country; about the cloud, about ‘types of clouds’, about the difference in functionality between on-premise and cloud-based ERP, costs to migrate to the cloud as well as total cost of ownership to be in the cloud; it’s a broad-based topic, so let’s get started.

One of the biggest surprises to most of us are how many types of clouds there are: the public cloud and the private cloud are the biggest differentiators; you can also be hosted.  The next differentiator is understanding whether or not the ERP you are considering is web-based, meaning that it was specifically written to run in the cloud. While there’s nothing wrong with moving an on-premise ERP product to the cloud (also known as hosted), it won’t have as long a life (be as scalable) as an ERP product that was written from the ground up specifically for the cloud. Simply put, if you move an on-premise ERP to the cloud, when the on-premise version is phased out by the original author you’ll have a limited amount of time to buy additional functionality, users, service packs, and upgrades. The next question is how important these issues are to your company.

The easy answer is it depends on a few factors; the biggest issue is going to be how much change is potentially in your company’s near-term future. If you’ve had your on-premise ERP for a while, and your company’s not expecting any changes in functionality or reporting for the next three to five years, moving to the cloud isn’t probably to high on your radar. As long as on-premise server technology stays where it currently is, you’re good. If on the other hand, your company is in growth mode, values flexible analytics or reporting; you are probably on a slightly faster track. Either way, most of us will eventually get there and it will probably be sooner than we had hoped. As our technical environments all continue to evolve over time, it’s best to understand the current offerings and how to evaluate what’s currently being offered.

Many of our clients have been devoted fans of Microsoft Dynamics ERP, and with Microsoft’s recent announcement that all ERP and CRM products need to have migrated to the cloud by January 2028, there is a renewed interest in what all this means for their companies. Many of their products are composed of hundreds of modules and thousands of plug-in applications; which have made their products very popular. Clients often ask if they can take all that functionality to the cloud, and most of the time the answer is that you can take some of the functionality. As of today, some of it isn’t yet available. The best way to evaluate whether or not your company is cloud-ready is to look at the functionality you have today vs. what’s available and then evaluate every difference: do you use the missing module(s)? Are they critical?

If you’ve determined that the functionality you need is in the cloud, the next consideration is how much and what kind of data you can take to the cloud with you. Master files (customers, vendors, accounts) and current data (open invoices, current period transactions) are relatively easy (if not inexpensive) to move to the cloud. You can typically load previous year(s) financial information, in summary format. Depending on your company’s record retention policy, most companies opt to maintain their legacy ERP systems for the same number of years as their retention policy. That’s the most cost-effective way to maintain their current level of detail. Even if your company decides not to maintain your accounting servers, most ERP systems can be moved to a laptop running SQL Express with relative ease. But what about the companies that find out that the functionality they need isn’t yet available in the cloud version of their ERP software; do they have options and what’s their criteria to decide next steps?

If your company finds that the functionality you need isn’t available in the cloud today, the first question is when will it become available? Our advice to clients about future availability has been not to move forward based on promises unless there are ISVs offering that functionality today. If that’s not the case, then you may want to consider other cloud-based software programs that do offer the functionality that your company needs. mbsPartners offers other cloud products, and it’s worthwhile to look at what’s available and compare. Bear in mind that the cost of migrating your current data to the cloud is probably pretty comparable regardless of which cloud ERP product you choose. 

Once you’ve made your selection between cloud ERP products, remember that there’s work to do before and after you move to the cloud. Typically your current software needs to be reasonably current, the data needs to be reasonably clean, and your team typically does the data clean up. The new software needs to be configured, and the reporting from your legacy system needs to be set up.

You have options on training: you can do some training beforehand using a copy of your current data. It means you’ll transfer the data twice, but doing that can be a lot less stressful for your team and you can tweak the configuration before GoLive. If all this has peaked your interest or you have additional questions, let’s find a time to chat about your company’s specific issues. There’s no time like the current to begin thinking about the future. Please feel free to reach out or use the link below to schedule an appointment with our team at a time that’s convenient to you.

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I look forward to beginning this next chapter with you,