Cloud no guarantee for high performance, at least not within ERP

There is nothing new about the world gradually moving towards cloud-based services and hosting. Cloud services have according to a modern approach been available since the 1990s and received large attention in connection with IBM launching its advertising campaign “On demand” in 2003. Today, 17 years later, we can state that almost everything related to IT is based on the use of cloud-based technology or cloud-based services.

The drivers for moving from local hostage to a cloud-based infrastructure are many and one of the main arguments is the benefits of constantly being on a modern and updated technology. At a time when technological development is taking place at breakneck speed, more and more organizations, which have not yet taken the step to the cloud, will be hit by very large investments to catch up with their competitors.

Another driver for introducing cloud services is scalability. In the meaning of giving the customer possibilities of scaling up the use of IT through a simple “click”. As the market has matured in this area, we can state that most suppliers of cloud-based services and cloud-based technology today can offer scalability of hosting and load balancing in real time to increase the customer’s access to infrastructure and communication.

At the same time, there are reasons to raise a warning finger when it comes to system performance related to cloud-based services. In the last years, HerbertNathan & Co have had insight into several ERP implementations at large organizations that have moved to cloud-based business applications and ending up with really poor system response time. With respect for involved parties, we choose not to point out any part, but we can indicate that we not are referring to the smallest ERP system vendors on the market. On the contrary, these cases are related to vendors with significant size and resources.

What we have experienced in these cases that have been affected by poor performance is that the cloud-based infrastructure has not created the availability of “unlimited scaling up” that was promised when signing the contract. In a modern and often quite complex business world with many involved integration parties and large volumes of transactions together with advanced forecasts and real-time calculations, the technical infrastructure often lands in several layers of systems and databases. And often the system integrator has increased the complexity further by extending the system functionality with modifications or other 3d party apps.

The result for the customers affected by these performance problems is that every included part is pointing finger on someone else and that none of the involved vendors or partners take responsibility for the situation. Instead, the customer is forced, at his own expense, to make large investments in finding fault and optimizing his environment. And sometimes forced to accept that the new business application actually will not be able to roll out on a large scale to the included business group.

The advice that can be given is that customers who are planning for the transition to cloud-based business applications should not only focus on “uptime”, which today often amounts to 99.8%. It is equally important to place high demands on the system performance during the selection process and, as part of the testing and acceptance control, verify with large transaction volumes that the system really ca deliver expected performance. In this context, it is also important that the roles and responsibilities of the system vendor and the system integrator becomes clear and that the risk of these two parties pointing at each other when technical challenges arise is avoided.