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What’s really new with the Cloud ERP Providers?

While I am a huge believer in the Cloud model it seems the marketing messaging and the reality of the benefits are getting a bit blurred? Beyond the hype - what is the reality of what's new?

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Bob -

If I understand you question correctly, I think the small to mid size cloud systems are moving into the mid to large size biz areas.

That is, businesses that would normally just becoming a Dynamics or Netsuite type customer are finding that the QB and Xero's of this world and the spate of industry specific add-on's are squeezing that area.

As these providers and their add-on partners mature, the question will become where are the breaking points for moving to "higher-end" systems.

The old stand-by's of transactional limitations or multi-currency as an example are quickly fading behind us.

Topic Expert
Bob Scarborough
Title: CEO
Company: Tensoft, Inc.
(CEO, Tensoft, Inc.) |

Hi Wayne,

That is a valid point. I do think the features of system between the Tiers do move - Tier-2 systems do incorporate Tier-1 features, Tier-3 systems do incorporate Tier-2 systems. At the same time - if QB or Xero trades off their simplicity for more complex controls and functionality they will leave a gap in the Tier-3 space for a competitor to take their place. I'm not sure this is new for Cloud applications?

What I was hoping to learn about was more a comparable newer cloud company compared to a company that has been around for a while. Most people would say the new cloud companies have not invented the general ledger. Certainly cloud companies have add a required / beneficial layer of service.

There are impressions and anecdotes - I was curious what people believe is really different. Some categories where change may have / may not have occurred:
1) Ease of Use / User Interface?
2) Changed the nature of accounting?
3) Changed the cost or TCO model?
4) Changed the business model for selling/marketing financial solutions?
5) Changed the nature or capability for reporting and analysis?
6) Other dimensions?

There are probably multiple ways to view this. My hope was something beyond what we intuit or pick up from casual impressions to some specific thoughts or feedback...

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Bob -

To answer some of your questions:

1) Ease of Use / User Interface? - As we become more web-centric, these interfaces are becoming easier to use, less cluttered, and more graphic (a good thing).

2) Changed the nature of accounting? - yes, because the infrastructure and limitations of server based systems have been eliminated. With add-ons becoming far more niched, since they need only adhere to an API, ERP systems can move to CRM and back again, with the enterprise employing the same backend for all clients.

3) Changed the cost or TCO model? - This is all dependent on Tier, add-ons, etc. But it must be less from an infrastructure cost.

4) Changed the business model for selling/marketing financial solutions? - I would say so, the parent can do most of the selling by offering trial versions (which is a preferred methodology to see if the software meets the business needs).

5) Changed the nature or capability for reporting and analysis? - With the ability to write a program against the API, it probably is easier to write custom reports.

6) Other dimensions? - The only dimensions that still bothers me are a) security; be it data security or access to my data, as well as data mining by the software vendor and b) how I can get all my data out; backing up my data locally.

Topic Expert
Bob Scarborough
Title: CEO
Company: Tensoft, Inc.
(CEO, Tensoft, Inc.) |

Thanks Wayne - that is the type of discussion I was hoping for. Some of my thoughts are below. It would definitely be good to hear from others as well.

1) Ease of Use / User Interface.
* I do agree that models are changing - and believe they have changed again from most of the current Cloud ERP providers. For example there is a move away from a header / lines transaction model to a workspace model - and there are definitely new expectations related to the look and feel of the application.
* That said I don't think this is unique to the Cloud providers. There are a few providers who built their applications with a separation of the user interface from the business logic - so there are 'older' applications that offer the same ease of use with new web interfaces.

2) Changing the Nature of Accounting
* While I agree that infrastructure has transitioned I would call this more of an IT transition than an accounting transition. Or it could be called a more dependable / service oriented IT approach to ERP.
* APIs and Open Integration have certainly progressed - and all of the new generation of Cloud providers have these. Product extension and integration is expected. This type of capability has existed prior to the Cloud ERP providers - but it is certainly more pervasive and is always expected now.
* I do think that capabilities within the ERP have changed over time - and that if the new capabilities (say workflow) were not built into your application natively from the start you would not measure up to the newer cloud ERP solutions ...

3) Changing the cost or TCO model.
* I absolutely believe Cloud ERP is lower total cost (hardware, people, processes) than on Premise ERP - and provides a better overall service solution.
* In some ways Cloud ERP has brought high end infrastructure to the masses.

4) Changing the business model.
* This may be one of the more dramatic changes - beyond free trials to marketing messaging and sales focus.

5) Changed reporting and/or analytics
* This is part of the new expectation - and may be done better on average. I'm not sure it is something the new Cloud providers do better by definition ...

Bob

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