Why it’s a good idea to switch to cloud financial management software

Upgrading your on-premise financial management (ERP) system is a major undertaking. It take a long time, it is risky, it costs a lot and it really adds little business benefit. You are forced to upgrade as the vendor will only support a version of the software for a period of time. There has to be a better way!

If you run an on-premise financial management (ERP) application, you probably already have experienced the pain of an upgrade. A few years back our client upgraded their old financial management system (which, by the way, after they upgraded was immediately out of date as the vendor released a new version). The project took nine months, well over a million dollars and countless hours of work by the internal IT team, business operations and leadership. It went pretty well as far as upgrades go, however, the systems manager was incredibly frustrated by the entire process, cost, and risk.

There was very little business benefit to the upgrade to justify the cost.  She proclaimed:

I never want to do that again. There HAS to be a better way!

Fortunately, there is a MUCH better way. Cloud financial management applications are available for small, medium and large enterprises. One of the many benefits of multi-tenant cloud is the upgrade (or update process). There are four things you need to know about how the upgrade process works with multi-tenant cloud applications.

1. The cloud vendor handles all of the infrastructure upgrades. Here are all the things you need to do update your infrastructure when upgrading your multi-tenant cloud application . . . . . . . . . . . . . {crickets chirping}. Everything related to the technology stack is handled by your cloud vendor. You no longer need to worry about databases, app servers, Web servers, etc. ever again. (Yeah!)
2. The cloud vendor simplifies the mechanics of the upgrade. A month before the upgrade, the cloud vendor provides you with release notes and an upgraded test copy of your application. Your job is to test and determine what new features you want to use. One customer said the experience of upgrading his cloud application was pretty eye opening compared to his experience with on-premise ERP upgrades. He pulled a group of his colleagues into a conference room for a couple of days, did some regression testing, and evaluated the new features. Two weeks later, the cloud vendor upgraded his production instance overnight. That was it…minimal cost, very little to no risk, and two days in a conference room. It was a non-event, just like these upgrades and updates should be.
3. Upgrades are frequent. With cloud solutions, all customers are on the same version of the software. This allows the vendor to create multiple releases per year (vs. one release every three to four years in on-premise solutions). It also means your vendor can innovate and respond to changing market dynamics much quicker than their on-premise cousins. During one upgrade, one of my clients actually asked “is this the latest version of the software?” It was, but the latest version of the software was designed and developed three years ago and was already out of date.
4. Upgrades are full of new features. Most multi-tenant cloud providers have a “voting process” or “brainstorms” where customers greatly influence the product roadmap. This allows customers great insight (and influence) to what is coming in the next release. Each release has updates, fixes and new features that you can implement at your convenience. Your multi-tenant cloud vendor can deliver rich features that react to changes in technology (e.g. mobile, predictive analytics), business (e.g. new revenue recognition rules), and customer requests.

Upgrading your business applications should not be a strategic initiative you need to plan for every four years. It should be a seamless process. It should happen automatically. It should not be risky. It should be a non-event in terms of effort. This is the promise and reality of cloud applications.