But something happened along the way — the cloud won. Legacy vendors came to realize that as customers became aware of the benefits of modern cloud applications, they’d have to change how they market their wares. In my experience as an ERP analyst, and what we continue to hear from analysts today is, it’s difficult for customers to understand and evaluate what a cloud solution is and why it should matter to them.
But there are differences, and customers should know what they are. When evaluating a cloud solution, it’s important to dig deep and ask lots of questions on the following areas.
1. Integrated applications
Legacy ERP vendors all have portfolios of applications they have built or bought. When considering a cloud solution that touches more than just one area of the business, customers should ask about the origin of all those applications and how they will come together. Because even if they’re all hosted by the vendor, a lot of time and effort may still go into designing, building, testing, and deploying integrations during a so-called cloud deployment.
This maintenance does not end with implementation. Different applications in the portfolio may get updated at different times, and the technologies used to create the integrations also may change.
This all conflicts with one of the biggest benefits of a real cloud, which is reduced IT complexity. A cloud system should leverage a single technology stack as it alleviates or limits those integration challenges. It also ensures that all data is truly unified within one cloud system for both running the business and reporting the results.
Want to know if it’s a real cloud rather than a cobbled together collection of hosted applications? Ask a vendor to demonstrate how to build a report for an executive team with its cloud solution that combines both workforce and finance data ― and do it while you stand there and watch.
2. Business process design and change
The promise of fast time-to-value with cloud application deployments is now liberally used across the enterprise vendor market. A true test of how swiftly an organization can absorb and realize the value of a new system depends heavily on business process design and change.
Re-automating the same business processes will not result in anything new and better for customers. However, designing business processes from scratch slows time to value. Customers should look at what is delivered standard by the provider and how they can adapt those processes for their specific needs.
A good test: ask a provider to make a business process change on the fly during its cloud demo (such as re-routing the manager approval process for vendor payments). Then see how easy it is — or not.
3. Configuration and extensibility
Another area required for fast time-to-value is application configuration. The old way of doing things was to buy the software from the ERP vendor and then hire a service provider to customize it. The better option for a customer is to have a wide range of configuration options, so it can meet its requirements for less cost, time, and complexity than customization. Now, many of the same legacy ERP vendors who not long ago declared that configuration was a short-coming of the cloud model now use “configurable” to describe their own products.
Customers should ask: how do I configure this application for my organization’s specific needs (for example, removing unneeded tabs in a view of global suppliers); how do I configure a business process (such as onboarding a worker); and are these same configuration capabilities available across all your applications?
A vendor should also offer some degree of application extensibility for a customer’s specific needs. Be sure to understand the pervasiveness of extensibility: which applications are extensible? Do different applications within the portfolio require different tools for extensibility? If so, how do I handle extensibility across applications that use different tools?
4. Reports and dashboards
It’s becoming standard practice to include reporting tools and dashboards with cloud applications, but it’s important to ask questions and understand the underlying architecture that delivers data and insights through those tools. The difference in the user experience and the quality and relevancy of the data delivered depends on that architecture.
This is an easy one to evaluate. Ask the provider to demo a report. Then, request to see how to access related information that is not part of the drill-down on the report, and/or to take action based on information in the report. For example, ask to see a view of customers from within the finance application, and then a view of invoices from customers across global legal entities. It shouldn’t take more than one click.
There are so many solutions out there from legacy vendors that are labeled as cloud applications. It can be hard to tell the difference, but the differences matter. Time spent understanding the details will hugely impact the overall customer experience.