The Top 5 Reasons Why Consulting Firms Are Moving To Cloud ERP

Posted by Stefan Grahn on August 22, 2014

Why consulting firms are moving to cloud erp

IDC’s 2014 Global Consulting Survey shows that almost 73% of Consulting firms are planning to move their systems to the cloud over the next 12 months. That’s right – more than 7 out of 10 firms will be moving some or all of their systems to the cloud over the next year. Historically, it’s rather difficult to find a technology-related initiative in the Consulting industry with that type of rapid adaptation rate.

So why are a majority of Consulting firms globally jumping on the cloud bandwagon?

Here are what I see as the top 5 reasons why Consulting firms are moving to Cloud ERP:

1. 'Latent’ demand for more effective support for business processes

Rather ironically – as many are selling such initiatives to their clients - Consulting firms have historically made limited investments in business support systems compared to other industries. Siloed systems, manual processes and spreadsheet solutions are all too common even in mid-sized firms. Many firms have grown out of their existing solutions a long time ago. However, as there has been a lack of affordable purpose-built, fully integrated ERP solutions, many firms – especially in the SME segment – have postponed their initiatives and managed with what they had.

My Tip: Cloud ERP delivered by industry specialists changes this. ERP that can be rapidly implemented (thanks to preconfigured industry solution templates) and bought as SaaS makes enterprise-class ERP available for all Consulting firms with 10 consultants and more.

2. Real-time visibility and analytics are increasingly important

Many Consulting firms have been able to stay competitive and profitable even without reliable and timely business insight. However, commoditisation of services with increased competition and price pressure as a result, a shift towards more fixed fee deliveries, and more complex multi-discipline and multinational deliveries have made real-time visibility and analytics increasingly important.

My Tip: There are two ways a Consulting firm can gain better visibility and analytics:

  1. by implementing a Business Intelligence (BI) solution that consolidates data from disparate data sources. This is typically a rather expensive initiative that takes many calendar months
  2. by implementing a fully integrated purpose-built Cloud ERP solution. This would in my opinion be a much more plausible and affordable approach.

3. Cloud solutions have matured

New ideas are often met with scepticism. This is true for the idea of moving all your mission-critical systems and valuable business data to the cloud. Luckily, cloud companies such as Deltek, and Workday have successfully proven to C-levels and IT executives that the cloud model is not such a bad idea. On the contrary, moving to the cloud is more secure, more reliable, more robust and more scalable than running solutions in your own data centres.

My Tip: Many Consulting firms have world-class IT competency, but the consultants are used to delivering projects to clients and internal IT typically don’t have the resources, budgets or knowledge available to run enterprise solutions securely, robustly, or efficiently enough. Instead, consider turning to specialised Cloud Operations teams who have the advantage of utilising world-class infrastructure.

4. Service-Oriented Architecture

SOA was a much hyped concept several years ago, and the cloud model has made it more relevant than ever. One very common concern with moving to e.g. Cloud ERP and Cloud CRM used to be the limited integration capabilities available in some cloud solutions.

My Tip: No ERP or CRM system is an island entire of itself. Flexible and powerful integration capabilities are an absolute requirement regardless of the system being in the cloud or on premise. Leading cloud solutions have a service-oriented architecture and offer both open web services capabilities and pre-configured standard connectors to various 3rd party systems and data sources.

5. A compelling business case

In almost every case we have seen that the business case for Cloud ERP compared to on-premise ERP is compelling. The only caveat is that any comparison between cloud and on-premise alternatives needs to be relevant and accurate, i.e. include all internal and ‘hidden’ costs of the on-premise alternative.

My Tip: The TCO/ROI advantages achieved through selecting multi-tenant solutions and economies of scale, as well as the TCO/ROI advantages of simply being able to afford better and more sophisticated solutions, are very significant.

7 out of 10 Consulting firms could be wrong...

To conclude – 7 out of 10 Consulting firms could be wrong, but in the case of Cloud ERP they most definitely are not. I have selected my top 5 reasons for moving to Cloud ERP above, but there are many other pros and very few relevant cons. 

My Prediction: The weather forecast will continue to be dominated by cloudy skies.