ERP connecting various business systems
The answer to avoiding a costly misstep is often a hosted ERP solution.

According to the International Data Corporation, companies will dedicate more than 53 percent of their IT budgets on digital transformation initiatives by 2023. No doubt, much of those resources will be spent implementing enterprise resource planning (ERP) software.

From accounting to workforce management, ERP solutions deliver centralized control, increased efficiency and greater operational visibility. For convenience retailers and petroleum wholesalers dealing with disparate systems, these promised outcomes are particularly attractive.

The Key to Avoiding an ERP Disaster

Despite the best intentions, ERP implementation projects can veer off track. The results can be catastrophic, with organizations wasting large amounts of time and money.

For convenience retailers and petroleum wholesalers of all sizes, the answer to avoiding a costly misstep is often a hosted ERP solution through their ERP vendor or a managed service provider (MSP). Here are a few reasons you should consider making the leap:

Free Up Your IT Staff

Many companies in the 1990s implemented on-premise enterprise applications using their own IT resources. But that model began shifting to managed services in the early 2000s. One of the most important contributing factors was the benefit to IT staff.

Companies that use their ERP vendor’s managed service, whether through a hosted service or cloud solution, reduce the risk of implementation failure and free their IT team for more strategic functions. This is especially helpful for organizations with limited IT resources.

In addition to removing the day-to-day, tactical responsibilities from internal resources, the vendor’s team offers expertise in implementing and managing these complex systems. They do it all the time for other customers with similar environments. Consequently, they’re familiar with the pitfalls of implementation, can quickly perform routine maintenance and updates, and are capable of troubleshooting and resolving issues when necessary.

Reduce Upfront Costs and Long-Term Risks

Implementing an ERP system is a costly endeavor. Sure, there’s the cost of the actual software to consider, but the expense doesn’t end there. There’s implementation, training, customized development, process redesign, maintenance, upgrades, support…the list goes on.

Moving to a hosted or cloud ERP solution reduces the sizeable upfront costs. This is largely because they don’t require companies to build up their IT infrastructure, which includes expensive servers, to support an on-premise ERP system. This allows greater financial flexibility for the organization.

Companies can also lower long-term risks by eliminating the need to hire full-time systems experts to maintain and upgrade the supporting infrastructure and applications. It also allows you to offload some of your liability to the vendor by requiring them to put in all the security, redundancy, and disaster recovery that also drives up costs far beyond the base operating requirements.

Speaking of applications, as you’re searching for the right ERP or MSP partner for your business, keep in mind that the best option is to find a partner with technical consultants who have experience managing both the environment and ERP applications specific to your business. You’ll definitely want to make sure that’s included in your hosting agreement.

Companies tend to think that running ERP systems locally will provide them with the best performance, but that isn’t necessarily the case. They often underestimate the resources they need to maintain optimum performance—something that is especially critical for businesses that are looking to grow.

Hosted and cloud ERP systems allow companies to scale the ERP systems as they grow and take advantage of new technologies faster. But it’s important to do your research.

Some managed service providers rely on using shared infrastructure with several customers running various application types on the same hardware. Sure, this lowers their costs, but it may not deliver great performance for large database solutions like ERPs.

That changes when your provider specializes in hosting a specific ERP system. This allows them to implement a built-for-purpose infrastructure tailored to your needs and the needs of the specific ERP. In addition to having the expertise of technicians who know the software, you also get better performance.

Do Your Research

It’s estimated that around 60 percent of ERP projects fail. But that doesn’t have to be your fate. Providers who offer hosted or cloud ERP solutions have certainly been effective in staving off disaster. Still, it’s important to do your research, and make sure you select a partner built for your business.

Did You Know: Your Source for PDI News provided by PDI, the leader in enterprise management software for the convenience retail and petroleum wholesale markets.

Meet Nate Russell

Nate leads the Technology and Managed Services sales efforts for PDI Software. Over his last 6+ years at PDI, he has helped hundreds of customers navigate the challenges of migrating their legacy on-premise ERP implementations to the PDI Cloud. Nate holds a Bachelor’s in philosophy and theology, as well as, a MBA from the University of Mary Hardin-Baylor.

Nate’s LinkedIn profile.