When the bulk of your IT budget is spent on maintaining your on-premise business systems, it can be challenging to start investing in a cloud-based environment. But there comes a time when the hard numbers can no longer be ignored—and it’s clear that the “old way” of doing things is costing your company more than you’re comfortable with.
When is it Time to Move Ahead with New Technology?
It helps to look at the equation from a birds-eye view. There are the actual costs associated with both maintaining a system, but then there are the opportunity costs of not upgrading to a system that’s designed for business growth. Indeed, changing gears and adopting a new system carries its share of costs, too; in the long-run, it might make sense to “cut your losses” and move forward with a more modern approach to data and process management.
To be sure, it’s too simple to say, “Compare higher up-front costs to lower monthly fees and you’ll find your answer.” Calculating Total Cost of Ownership is complex. We hope the following insights will help you assess your current tech spend and determine if “now” is the time to take a look at cloud-based solutions.
1. On-Premise System Maintenance is Expensive
Keeping a system in-house has built-in costs that are hard to escape. Legacy software requires hardware to run it, data centers to house it, electricity to power it…you get the idea. What’s more, system upgrades can create downtime, new functionality or integrations may require coding that takes costly development time, and your internal IT staff stays busy with general administrative tasks including user support, data manipulation, and other not-so-strategic initiatives.
On the other hand, public cloud software’s shared tenancy model frees your business from these confines—and the costs that go along with them. Your software and data live in a secure cloud (on your vendor’s remote servers) that’s updated and managed, along with all software and user support, by your vendor’s IT team—automatically. Discover more in The Rise of the Fake Cloud: It’s Time to Get Real.
2. Manual Processes are Slowing You Down
Speaking of automation, or lack thereof, if your on-premise business systems keep you operating in manual workflows, you’re probably finding it hard to get ahead—let alone keep up. While your existing processes may be working for you, they’re inherently inefficient. If decision-makers are waiting around for reports to run, or your IT department is putting in overtime hours to deliver the data your C-Suite needs to understand key business drivers, money is slipping through the cracks of time.
The automation afforded by cloud-based data and process management results in greater productivity, increased efficiencies, higher quality, and cost-savings across the board. And since users access their tools at any time from any internet-connected device, your employees can be more productive, too. Don’t miss 5 Mobile Office Productivity Statistics You Need to Know.
3. Security and Compliance Risks
If your legacy system is no longer supported—or you’re not keeping up with system updates—what happens with your compliance requirements? If you miss a beat, skip a deadline, and fail to comply, things can get costly thanks to any number of fees and penalties. And you can lose precious time when you’re not adequately supported (or prepared) with a backup and disaster recovery plan. Learn more in The 5 Risks of Using An Outdated ERP Solution.
Housed and expertly managed in highly secure data centers, cloud software is automatically kept up-to-date so you’re always running on the latest version of your software. Yet it should be noted that legacy replacement is risky, too—so if you’re making the shift, do your due diligence and work with a trusted partner who can help you safely manage the transition to the cloud.
4. Lack of Data Integration
Considering the speed of business software innovation, it’s likely you’ve had to introduce some form of new technology to your IT environment. It’s also likely that the software wasn’t a “cinch” to sync up with your legacy system, because of disparate data or simple incompatibility. Unfortunately, when decision-makers can’t quickly access all of your business data—or they can’t crunch it in just the right way, they miss out on important insights, even revenue. And that means your vendors and customers are probably missing some functionality, too.
Ask yourself, Are Data Silos Creating a Big Data Problem for Your Company?
Cloud-based business software is built to connect with other cloud-based apps—its architecture and code is flexible in a way that legacy systems were never meant to be. This flexibility enables decision-makers to access all of their data in real-time, providing a 360 view of the company’s health at any moment; and users, even in the field, can tap into drill-down reports enabling them to make the most of sales opportunities.
It might be time to start Empowering Your Remote and Mobile Workers with Cloud-Based Business Systems.
But There’s More…
The CIO article What Not Upgrading Enterprise Software Could Cost You leaves us with some additional questions:
- Revenue – Would new software enable the selling of new products or services?
- Customer retention – Would a new system delight customers with faster and mores satisfying service, perhaps online?
- Training costs – Would you save money if you didn’t have to keep employees, existing and new, “up to date” on obsolete systems?
Today’s cloud-based business systems help you achieve so much more than the technological relevance that looks so great to corporate stakeholders and customers. They make it easier to bring products and services to market, enable better customer experiences, and put insights into the hands of decision-makers in real time—all the things your business needs to get ahead.
Contact us for help exploring your options for replacing legacy systems with modern, cloud-based business software.
Additional Resources:
3 Reasons Your Employees Want Cloud-based ERP Software
