These days, very large global enterprises appear and disappear with the blink of an eye. The Internet is full of those successful (and unsuccessful) stories. Many of the successful growth stories involve M&A initiatives, as well as expansion to geographical regions that open new market possibilities. Along with those new opportunities comes the challenge of integrating diverse business processes supported by several different enterprise systems (sometimes, the good old spreadsheets). Local culture and diverse legal requirements make the integration scenario even more challenging.
So how does Cloud ERP fit into that picture?
Recently acquired business units are not necessarily high revenue generators from the start. Incorporating fast, standardization of business process execution is something that acquiring companies may look for, especially in systems of record business capabilities. In that sense, an application that enables quicker application provisioning, and enforces a standardization mindset (let’s assume we doing things the right way here), is certainly going to help the enterprise get to a global ERP template approach. A solution that is able to provide a technical platform that enables embedded localization features can also help a lot, as the last thing corporations want to do is spend mountains of money to enable a big set of customizations to fulfill local legal requirements that will not add value to the business.
However, what will Cloud ERP not solve at all?
I mentioned a standardization mindset. That does not come free, nor is it a seamless move. Business areas using the application will need to support it. Revisiting business process execution is not always easy, and resistance to change is part of the human nature. Therefore, organizational change management is a key part in the success of this initiative. Moreover, when the word global is part of the play, dealing with diverse cultural backgrounds just makes it more difficult. Getting local business sponsorship is a considerable challenge in that environment, especially when talking about acquired companies. Additionally, vendor promises of full-fledged country localization coverage are not always fulfilled – which eventually means adding customization and partner solutions which will add complexity to the setup. Finally, internet infrastructure may significantly vary in availability and costs along regions.
So, will Cloud ERP get me there? It certainly can, but it will not fulfill the dream by itself. Will it do better than the old on-premises ERP solutions? Maybe, but there are additional variables to consider, to get a full picture. Therefore, having a strategic view on that is more than important, it is mandatory.
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