3 Myths About Cloud ERP Software Debunked!

3 Myths About Cloud ERP Software Debunked!

179019172Unfortunately, there are several myths floating around the Internet about cloud-based tools, especially cloud ERP. The problem is that the owners of small- and medium-sized businesses (SMBs) miss out on 
the amazing benefits of these tools because they unnecessarily fear untruths.

It’s time to dispel these myths! Here are three of the most common misunderstood facts about cloud ERP software, and why it makes no sense to continue relying on outdated, legacy systems.

Myth No. 1: The total cost of ownership (TCO) of cloud-based tools is significantly more than on-premises solutions. 
Fact: While making an apples-to-apples comparison of TCO for on-premises and cloud ERP is difficult, research shows that on-demand applications perform much better for SMBs than legacy systems.

Calculating the TCO of cloud-based software requires considering the costs of the subscription, application support, implementation fees, customization and integration costs, servers, Internet access, end user support and training. To calculate the TCO of an on-premises program, you’ll need to take into account paying for maintenance, support, training, utilities and upgrades.

Although complicated, the Yankee Group managed a comparison. The research team released a survey that shows that the TCO of cloud ERP software is “significantly better” than on-premises solutions for SMBs and midmarket enterprises when evaluated over three to five years. On-premises solutions, the survey notes, require significantly higher investments in IT infrastructure, deployment and support. Cloud solutions, on the other hand, eliminate such expensive support costs. Cloud solutions also have a faster ramp-up time, lower ongoing costs, less IT support staff and enterprise-class infrastructure, which also boosts the TCO.

Myth No. 2: The cloud is not a safe place to put financial data.

Fact: Criminal attacks, faulty technology or natural disasters could happen to anyone at any time. Regardless, the chances of your data being available when you need it are higher at a data center compared to an on-premises system. 

It’s really a shame that business owners still think their data is less secure in the cloud. They’re wary of putting their sensitive financial and customer data in the cloud because it feels safer to have the data in the office server. However, this fear is more psychological than factual. Fortunately, this myth is slowly starting to diminish. SMBs realize that data centers have very high levels of compliance and security compared to their local environments.

Remember, these data centers are world class and designed specifically to protect your information. Their firewalls and encryptions are much stronger than those at your office. A data center is also more liable for security breaches than your company. That means the center works extra hard to keep people out, while your office doesn’t have this kind of liability or pressure. And the internal monitoring of employees in data centers is greater than an average office building.

Myth No. 3: Subscription models are more expensive.

Fact: Subscription models are less expensive.

Here’s how the myth works: Business owners are prone to justify their aversion to subscription models by comparing the decision to buying a car. They’d rather buy the car and be “done with the payments” than deal with ongoing costs of a subscription. Never actually owning the car feels more expensive because for most people because, in truth, it probably is. 

But here’s the problem with drawing this parallel to software subscription models: Renting your ERP software is not the same as leasing a vehicle. For one thing, your automobile isn’t going to become out-of-date in a matter of a few months. Software, on the other hand, needs constant attention, upgrades and maintenance to make sure that users are compliant. This is a big deal, especially at year-end when it comes time to do your taxes, and these formulas and procedures must be absolutely correct or the company is liable for major mistakes.

Another reason SMBs “feel” that subscriptions are more expensive is because they only factor in the price of the subscription, rather than the added benefits. Sure, after 5 or 10 years, the subscription is indeed pricier than buying. But again, this is not a car. The subscription costs also includes maintenance, upgrades, security and other factors discussed more in depth earlier in this article.

It’s time for SMBs to truly understand cloud ERP costs. Don’t risk losing out on the benefits of cloud subscription models simply because you believe that they’re less safe and more expensive. Do the research and you’ll see that the facts are clear — your company succeeds and surpasses the competition by using advanced cloud-based tools.


No Comments

Post a Comment


This site uses Akismet to reduce spam. Learn how your comment data is processed.

Steve’s been with SMB Suite since 1998 and has been involved with nearly every aspects of the Company’s business as a strategist, professional services executive, cloud solutions architect, and senior consultant. In his current role, Steve is responsible for SMB Suite’s revenue and oversees the execution of ERP, CRM and BI projects for customers across a broad range of industries. Steve combines his expertise in MS Dynamics GP, CRM and other Microsoft products with a strong foundation in accounting and business to identify gaps and streamline customers’ processes. Prior to co-founding SMB Suite, Steve was previously Corporate Controller for MEHLE Behr and, prior to that, Audit Senior for Ernst & Young. Steve holds a Bachelor of Business Administration degree from the University of Texas at Arlington.

Jeremy is responsible for SMB Suite’s technology vision, strategy and implementation and is the architect of the Company’s Dynamics Cloud Platform. Highly adept in every facet of managed services, ERP systems and e-commerce platforms, Jeremy’s expertise spans the implementation and support of business and financial software solutions, as well as the customization and integration of SMB Suite’s cloud ERP technology stack. He holds numerous Microsoft and industry-related certifications, and was primarily responsible for designing the Company’s progressive business services platform in the early days of the Cloud. Prior to SMB Suite, Jeremy served as the financial analyst, systems administrator, and information systems liaison for a $2 billion financial services corporation.

Monty is responsible for SMB Suite’s day-to-day operation and, most importantly, its customers. As a leader, motivator and mentor, Monty creates loyal high performance teams willing to “walk through walls” to accomplish their goals. Prior to SMB Suite, Monty served as President of The Bradshaw Group (TBG), a global distributor, manufacturer, and repair facility for digital printers. In this role, he was the Company’s ambassador to its most important domestic, European and Latin American customers and TBG achieved a best-in-class Net Promoter Score of 74 for its superb customer satisfaction. Prior to TBG, Monty served as the General Manager of Sam’s Clubs three highest grossing U.S. stores and was named Regional Operator of the Year in 1999. Monty holds a BBA in Marketing from Texas Tech University and is an active member of Business Navigators. He has been active in Vistage International, Executives in Action, the Dallas/Fort Worth Retail Executives Association, as well as, A.P.I.C.S., the leading professional association for supply chain and operations management. Monty also volunteers with Hunger Busters and ManeGait, a therapeutic horsemanship organization.

David is a proven financial and information technology professional with expertise in providing business accounting software and computing solutions. He began his career by starting and managing a successful independent consulting practice for several years. He then launched the local systems consulting unit of Ernst & Young’s Entrepreneurial Services Group, leading the office into the hi-tech consulting arena. After successfully developing the unit for Ernst & Young, David founded NextCorp (which became SMB Suite in 2013) to serve the business software needs of clients throughout the US. David has made SMB Suite one of the best cloud ERP providers in the industry. In addition to being a successful entrepreneur and leader, he is a software and technology specialist, holding certifications in various Microsoft and other technologies.