ERP applications in the cloud as a tool to reduce business risk

A company using a cloud-based ERP gains a number of key benefits: data security, system functionality and, consequently, an efficiently operating enterprise. For this to happen, each business needs appropriate preparation for implementation, good planning and insight, as well as choosing the right system and testing tools. Why?
Because the experiences of many companies show that after the implementation is completed, it turns out that the software starts a new life – its own. Up to 59% of such operations take longer than planned, and as much as 74% exceed the budget allocated for this purpose. Just because a few important details are overlooked or ignored. Instead of a system that meets specific needs, errors appear and with them additional work, resources and time.

Reasons and effects

One of the reasons is that business processes in the company are more or less dependent on each other. Operations performed by selected department affect the tasks of the others. This means that the needs and functionality of each unit must be included in the new system implementation plan. Focusing only on selected aspects, e.g. safe data migration, may result in unnecessary risk.

A good example is a bug in ERP implementation, that prevented 27,000 University of Massachusetts students from registering for their classes and for the financial support system. On the other hand, some of the big companies, such as Nike or Hershey's, recorded sales losses of 100 million dollars, as a result of errors in the ERP system, e.g. in the part related to the supply chain operation.

Good planning and good system instead of uncertainty

The lesson is simple. A thoroughly and detailed implementation usually starts a long-term relationship between the company and the ERP software. Supervision over the system, as well as its proper maintenance are necessary for the effective implementation of operations in the enterprise, and a properly prepared control process does not burden the company's resources nor require additional measures.

Software producers such as Microsoft (Dynamics 365) develop various modules supporting all functional units of the company. They regularly develop, improve and invest in the development of their products. In turn, enterprises want to use the latest solutions and expect regular updates, and with them proper implementation and testing.

But should they be afraid of risk? Well prepared, rather not, and even if so, it should be remembered that these tools are designed to support the integrated management of the most important business processes - including the coordination of proper relations between individual departments of the enterprise. At the same time, system updates enable its further development and extension of the scope of integration. For this reason, the company's key processes are supported by ERP, and their regular updates prevent possible errors or threats.

Cloud ERP. What is important to remember?

Customization intricacies

A system with little or no modifications – so called "vanilla ERP" – may not be the optimal solution. In turn, its personalization can cause difficulties after implementation, and its further evolution becomes more difficult. Then the support of newer versions of the software requires an appropriate code rewriting and adaptation to new requirements. As a result, companies often postpone or drop updates, which puts the system at risk. Verifying the correct operation of customized applications is necessary with each system update.

Properly maintained ERP requires constant supervision and testing of system operations, including identifying and fixing flaws and the reporting and decision making processes improvement.

Regular modifications and improvements to the standard

Microsoft Dynamics 365 is an example of a system whose release plan constantly enriches the current versions with new functions. This allows companies to keep the tool properly adjusted to their needs.

The manufacturer from Redmond is a key supplier on the ERP market, and the continuous development of its product allows it to maintain an advantage over the competition. The challenge, however, is that customers are unable to benefit from the improvements unless they have the latest software version. So far, Microsoft has regularly released updates twice a year.

No updates are a threat to business

One of the undoubted advantages of ERP software is limiting human errors in business operations. When a customized system is not updated on an ongoing basis, the company is faced with the so-called butterfly effect. For example, a small change in the sales module may translate into large inaccuracies in the inventory and supply part. Moreover, it may negatively affect the external systems, like payment or shipping providers. This is another proof that updates should always be backed up by thorough testing.

Assessing the risk associated with updating threads often comes down to answering the question whether changes in the ERP system can affect business continuity. If so, it is essential to introduce the appropriate testing tools.

Automated testing - risk mitigation as a benefit of cloud-based ERP

Digitization and the related changes in the business space have somewhat changed the market paradigm. So far, it has been the big players that have absorbed the small ones, but today it’s the forward-thinking entities that gain a competitive advantage over the unwary.

A quick diagnosis of problems and their assessment is essential. The ability to identify disruptions in the business model, as well as to counteract them dynamically, is of key importance in the conditions of increasing competitiveness. With regard to ERP systems, this kind of activity enables and simplifies testing. Especially when the ERP system becomes very complex and requires special attention.

In the vast majority of cases, tests are performed manually and consume a significant part of the budget for ERP system maintenance. Moreover, they don’t guarantee all the benefits of using the system. In the era of cloud services, tests are performed by appropriately programmed robots that perform their tasks faster, more accurately and to a much wider extent. Currently, there are many automation testing service providers on the market, offering various tools – from simple to very advanced. Most often these are standard and free solutions prepared by ERP producers themselves, e.g. Microsoft RSAT (Regression Suite Automation Tool).

Companies that are more exposed to risk in the upgrade process are advised to perform more complex and flexible tests - Executive Automats (an alternativeto RSAT). The solution enables thorough and detailed testing of all programs in demanding and sensitive areas of the company's operations. Properly prepared test automation allows to improve product quality, and at the same time reduces costs and saves time.

Automation minimizes the risk in the ERP area. How?

Security as a basis for a fully functional business. ERP systems are usually implemented according to the specific needs of the company and therefore it’s not possible to run a standard ERP package in this case. It often happens, however, that a given entity customizes the new system, but omits to adjust it to the standards. The tests allow to avoid this problem and to identify undesirable threads and elements in various business scenarios. They show how the updates will work in the modified system.

More dynamic and consistent releases. Automation of tests in the ERP system allows to eliminate problems resulting from tedious and protracted manual software testing. The company can use the current version of the system on an ongoing basis, while at the same time ensuring cost reduction and beneficial ROI.

A cost-effectiveness ratio (part of CEA). Test automation enables uninterrupted monitoring of ERP systems, which greatly simplifies the process of finding and fixing any errors. Thus, it helps to avoid the serious losses that often accompany long-term, expensive - manual - testing of large amounts of data.

No human weaknesses. The complexity of ERP forces testing to be flawless and dynamic. Automation avoids all the limitations associated with the traditional (manual) test model. This translates into timely delivery of goods and services, as well as accuracy and high quality of business operations.

Unlike manual testing, the validation of cloud-based ERP systems is much easier, accurate and flexible. It does not require much staff, time or resources. Timely projects, maintaining ERP and increasing the quality of testing requires the company to use more reliable and faster tools such as Executive Automats. In a word, turn to automation.