Cloud ERP software – Are you asking the right questions?

The cloud, the cloud, the cloud.  Everywhere you go these days, you hear people touting the benefits of the cloud.   Are these benefits real?  For the most part, the answer is yes.   There is no question that having your data hosted in a world class data center is more secure than hosting it on-premise on your own servers, for example.  If you factor in the peace of mind of not having to worry about backups and disaster recovery, the benefits are even greater.   And, having the ability to access your data from any device, at any time, from any place that has an internet connection, can be a huge competitive advantage.

Assuming that the benefits of the cloud are real, maybe it’s time to think about moving your ERP systems to the cloud, if you haven’t already.   There are two ways to accomplish that.  If you’re happy with your current ERP software and it is still on the software vendor’s roadmap, the easiest and least expensive way to move to the cloud is to simply have your current ERP software hosted.   Alternatively, you may want to replace your current on-premise ERP software with a true cloud-based solution.  This is particularly true if you are growing and are looking for productivity improvements.

If and when you are ready to start evaluating new cloud-based ERP solutions, it’s important to ask the right questions.   Here are the four most important questions that every company needs to ask?

  1. Multi-Tenant vs. Single-Tenant?   Every software vendor says they are in the cloud now.  There is a big difference, however, between multi-tenant SaaS (Software as a Service) applications that were written exclusively for the cloud and single-tenant software solutions that are cloud enabled.   With Multi-tenant SaaS applications, every user is running on the same software.   Hence, you are always running on the most current version of the software and you never have to worry about loading service packs and upgrades because they are automatically applied for you.   This is generally a huge benefit for users, although that is not necessarily true for everyone.   Examples of multi-tenant SaaS applications are Sage Intacct and Microsoft Dynamics 365 Business Central.
  2. Open APIs?  You want to make sure that you have the ability to easily integrate your new ERP system with other cloud applications, if needed.  Integrating to cloud applications is theoretically easier if they offer a strong API (Application Programming Interface).   Be sure to ask them about their APIs.   Are they well documented?   Do they have existing integrations with other popular cloud products like SalesForce or ADP, for example?   Sometimes you will hear the term REST API.  If they say that they are using REST API or RESTful API technology, that simply means they are using existing technology and protocols for the Web.  That’s usually good.
  3. Device agnostic.   Most cloud applications today are device agnostic, but not all.  Device agnostic means that you can access the software from any device (e.g. laptop, tablet, smartphone) using any browser (e.g. Firefox, Chrome, Safari, Edge, Internet Explorer).  Make sure that the software you are evaluating is device agnostic.   If the software has mobile apps that is even better.
  4. SOC 2 compliant.   When you are using cloud-based ERP software applications, your data is sitting in a data center somewhere.  Obviously, it’s important that your data be secure.   Usually that’s not a concern because cloud applications are generally much more secure than on-premise applications.  That’s because the data centers have the economies of scale to have better security, better hardware, redundancy and higher quality IT personnel.   That being said, you should still take the time to confirm that the data center has been audited and that they are SSAE 16 SOC 1 or SOC 2 compliant.   SOC 2 Type 2 compliance is the strongest.   Ask them for a copy of their SOC 2 report.  If they can’t provide you with a copy of their SOC 1 or SOC 2 report, that’s a red flag.


SUMMARY.   The preceding four questions should always be asked when evaluating cloud-based ERP solutions.  If you are considering moving to the cloud, though, and would like some assistance in deciding what’s the best direction for you, please feel free to contact me a   Ask about our free cloud assessment.