[IMGCAP(1)]As many solution providers – particularly in the accounting/ERP space -- are taking note that their product portfolios may have gaps when it comes to cloud-based solutions, we ourselves quickly noticed that there was a gaping hole when it came to our cloud product portfolio.

As a result, we took to evaluating a host of potentially viable cloud-based ERP solutions in order to bring our clients mature, feature-rich cloud-based ERP.

Like most solution providers, trusted advisor status with our clients is something we strive for.  Therefore, it’s important to us as we evaluate our clients’ businesses and requirements that we can make a technology recommendation that is right for them. We’d been keeping our eyes on the various cloud solutions and concluded that we needed to have a cloud-based ERP solution to offer our clients otherwise, we’d be doing them a disservice.  

As part of our process of becoming a cloud ERP solution partner, we were careful to zero in on the operational challenges that were sure to come, in order to remain focused on serving our clients and helping them achieve their goals. 

Here, I outline five operational challenges to consider if you’re evaluating a cloud solution provider partnership:

  • Adjustments to Mindset -- When transitioning to cloud-based solutions, consultants and developers have to make some adjustments to their thinking.  First and foremost, there is less opportunity for the same level of access and control over the solution as a whole as you might be used to with an on premise solution.  However, that’s not to say that tools for customization of the software, report generation, etc. are not robust; for certain solutions they are.  
  • Balance of Workload -- There’s a fine line that should be recognized when making the decision to begin actively selling a new solution.  How will you manage the existing current solution work load versus new work?  Will you create a dedicated team or will you cross train existing staff?  Will you need to increase headcount?  Will fewer resources be dedicated to supporting current solutions?  Allocation of resources is key so as not to let any work slip through the cracks and place strain on client relationships. 
  • Delivery of Training -- From our experience serving clients with on premise solutions, there is an expectation that training will also be delivered on premise.  However, with cloud-based solutions, these expectations change and remote training becomes much more acceptable to most clients. Training can now be done more easily virtually since the software is cloud-based and can be accessed from any Internet connection and browser; support is also simplified.  This shift from extensive on-site presence to a more remote approach should be considered as there are efficiencies and flexibility gains for the partner organization. 
  • Profitability -- Solution providers should also look very closely at how a cloud partnership will work and determine whether it would will profitable for them.  Plan for upfront investments for education, loss of productivity of staff for the first year, and less realization on projects due to the learning curve.  Of course margins are extremely important.  Look at first year margins and what your on-going margins will be. A big advantage for a partner can be the on-going annuity that the SaaS model brings.   
  • Skill Set Development -- Whenever you start something new, there’s sure to be a learning curve.  Becoming a cloud ERP solution provider is certainly no different.  From software functionality and development languages to reporting tools, it’s important to ensure your team of consultants and developers are as well-versed on the new software as possible before starting that first engagement. One approach we have found effective is to find a skilled partner willing to share their experience and insights to help execute the first couple of engagements.  The bottom line is, in order to fully take advantage of cloud computing capabilities, IT organizations must transform themselves.

Cloud computing presents itself as a compelling option for many small and mid-sized businesses (SMBs), as well as larger enterprises, as it offers low cost of entry and ownership and faster time to market compared to traditional on-premise business software and servers.  But, before jumping in head first to begin providing these cloud services to your client base, careful considerations must be made. 
While the basic difference between on premises ERP and cloud ERP is clear, what may not be so clear is that the type of ERP deployment model you choose can have a significant impact across your business and your clients’ organizations. Every business is unique, so taking the time to consider how different ERP deployment options will affect your organization and your clients’ is worth it in the long run.

Mark Goodson is president of BCG Systems, an Akron, Ohio-based value added solution provider which represents Microsoft Dynamics GP, AX; Sage 500 ERP; and NetSuite. Read also his previous article on selecting the right cloud vendor as a partner.

 

 

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