As light manufacturers strive to optimize operations and reduce costs, the integration of cloud technology has become essential. It’s no longer just a “nice-to-have,” but increasingly it’s an absolute necessity to coordinate complex supply chains, achieve more agile production, and remain profitable in an increasingly competitive environment.

Gartner predicts that more than 50% of enterprises will use industry cloud platforms by 2028 to accelerate their business initiatives.

The so-called “Industry 4.0” movement toward digitalization, which includes IoT and AI, is reshaping the manufacturing field by creating smarter, more connected environments. While IoT enables manufacturers to monitor equipment in real time, AI helps optimize processes, predict maintenance needs, and make faster and better-informed business decisions.

Together, these technologies help manufacturers respond quickly to changing market demands. But to truly capitalize on these innovations, it’s important that you have a solid digital transformation strategy and lay the right foundation first.

Digital Transformation Starts with Cloud ERP Migration

If you’re planning to start a wholesale digital transformation strategy, or deepen an existing one, where do you begin? The answer lies in modernizing your core operations and shifting to deeper integration and efficiency in your ERP system.

Doing so consolidates once disparate functions, such as inventory management, financial processes, and supply chain management, into a single integrated platform. It also provides the added benefits of flexibility, scalability, and cost efficiency that characterizes cloud technology.

Here are some of the benefits of a cloud ERP system:

1. Lower Costs: By moving away from on-premise servers, you eliminate the need for expensive hardware, physical space, and extensive IT support. All of this directly translates into lower costs and overheads. You can also focus better on your business, since cloud ERP providers manage everything from updates to reducing downtime. Moreover, this shift away from an on-premise approach allows you to scale seamlessly without the high costs typically associated with hardware upgrades.
2. Better Security: At first glance, it might seem counterintuitive, but cloud systems are often more secure than on-premise setups because cloud providers prioritize robust security measures. These include firewalls, encryption, and VPNs all designed to safeguard your data. Additionally, with automatic updates, they take care of patching vulnerabilities, which means you’re always ahead of potential threats.
3. Simplified Compliance: One of the hardest parts of compliance is gathering all the disparate data and keeping track of it in real time against regulatory requirements. It can quickly become repetitive and overwhelming. That’s where a Cloud ERP system comes into play; it centralizes all your data with built-in features for automated reporting and real-time monitoring. This makes audits less of a hassle, allowing you to quickly access up-to-date records with minimal effort.
4. Real-Time Insights: An important upside to a cloud ERP system is that you gain real-time access to data, whether it’s inventory levels or production performance. The ability to quickly funnel data into analytics systems enables you to make faster, more informed decisions than would be possible with spreadsheets and legacy systems.This isn’t just beneficial for you as a business owner. A cloud ERP system breaks down organizational silos, giving every department greater visibility and fostering stronger collaboration. This means production teams with a clearer view of future sales forecasts, purchasing teams with more insight into inventory levels, and front-office staff with access to analytics from across the organization.That interconnectedness drives greater efficiency.

The Challenges of Cloud ERP Migration

While the benefits are clear, migrating to a cloud ERP system isn’t without its challenges. The key to success lies in recognizing and addressing these pitfalls early.

1. Lack of Vision: Migrating to cloud ERP isn’t simple; it takes time and careful planning, often stretching over the course of several months. If you dive into this project without a clear vision, it will be hard to realize meaningful progress. So, it’s important to define your business priorities, set realistic goals, and establish a budget while actively involving stakeholders across the organization.
2. Infrastructure and Dependency Issues: Before you start the migration, it’s crucial to assess compatibility between your existing systems and the one you’re migrating to, identifying any potential gaps along the way. Depending on the situation, you might need middleware or APIs to bridge those gaps. The last thing you want is to discover compatibility issues later that could cause major headaches if not addressed early on.
3. Poor Data Management: Poor data management can be a big challenge during cloud ERP migration. If your data is scattered across different systems, is in incompatible formats, or is just not organized well, it can mess up reporting and cause errors in the new system. And if you don’t properly address these concerns, you risk slowing down the entire process or causing mistakes once you’re live on the cloud.
4. Lack of Cybersecurity Planning: Systems and people are most vulnerable during migration because it’s a period of change. As your data moves between on-premise and cloud environments, and employees focus on adapting to new processes, the risk of exposure or breaches is higher. That’s why having a solid security plan in place to minimize these risks is so important.

How to Make Cloud ERP Migration Successful

So how do you navigate these challenges and set yourself up for success?

1. Start with a Strategy: Like any good strategy, a successful cloud ERP migration strategy starts with building a solid foundation. That means taking the time to assess your business processes, define clear technical goals, and prepare your data. Rolling out the deployment in phases helps minimize disruptions, especially when paired with proper user training. It’s also just as important to make sure everyone is on the same page and chooses an ERP that aligns best with your organization’s goals.
2. Make Data a Priority: When migrating to a cloud ERP, bringing bad data along can do more harm than good. If the data is outdated, irrelevant, or filled with duplicates, it’s best to leave it behind. Since your ERP system relies on accurate and consistent data, start by identifying data owners and pinpointing where the data is stored. Use data mapping to align legacy fields with the ERP system’s schema, ensuring that only accurate, relevant, and consistent information makes the cut. Finally, establish a clear strategy for managing data in the new system.
3. Test and Validate: Testing might seem tedious, but it’s worth it. Before going live, thoroughly test the new ERP system to ensure that all integrations, workflows, and features function as expected. It’s easier to deal with any unexpected surprises during testing than later. This includes validating data accuracy, ensuring that APIs and middleware integrations work smoothly, and validating automated processes.
4. Provide Education and Support: Addressing the human side of migration is just as critical as the technical side. Change can be challenging, especially for employees used to legacy systems. That’s where a managed service provider (MSP) partnership can make a big difference. An MSP can provide tailored, ongoing training and support to ensure your team adapts smoothly to the new cloud ERP system. This can play a crucial role when it comes to training, assistance, and bridging any gaps. In fact, a 2023 survey showed that businesses that hired a software consultant to implement their new ERP or business system achieved a success rate of 85%.

Cloud ERP Migration Made Easy

The Astute Technology Management team has been helping businesses in Columbus and Cincinnati adopt the technologies they need to beat the competition for decades. If you’re a manufacturing company that wants to embrace cloud and other digital technologies, contact us anytime at [email protected] or (614) 389-4102. We look forward to speaking with you!