5 Top Risks of Not Moving Your Document Management to the Cloud
As cloud storage techniques and technologies have continued to evolve, costs have decreased and ease of use and security of storage has improved. Electronic Document Management – EDM – has become the industry term for this type of solution. There are increasingly compelling arguments for using Cloud over on-premise solutions, even allowing for improvements in on-premise software. Let’s explore some of these points.
1. Out-of-date software
We are all familiar with the idea of updating apps on our phones on a regular basis. Typically the companies that write these apps do this for a number of reasons: bug fixes, new features, security patches, efficiency improvements, and so on. They actively encourage this updating process so that they only have to maintain one code base and don’t have to worry about customers using old software which then causes them problems.
The idea that we’d not update these apps on our phones reasonably frequently seems quite counter-intuitive. Yet the same cannot always be said of software on our business computers and this also applies to our office-based servers. And this is one of the risks of on-premise EDM and other storage and backup solutions.
It’s very easy to skip a few updates or the latest patches for your EDM software. What’s the harm – it still works, right? Well, yes it does. Probably. Unless, perhaps, there was a bug in the last version you updated to that stops it from reliably retrieving stored documents. Or which corrupts some of the lookup tables it generates after a certain period of time.
Equally, when you decide that you actually do need to update your on-premise EDM – and realise that it’s 5 updates behind – you might get a slightly unpleasant surprise when you ask how much it’s going to cost. Maintaining (and that includes allowing updates from) old versions of software is more expensive for the software house than simply looking after a single version of the code.
Moreover, if you lose data (say) due to a software bug and complain to the software house about it – but have been using an older version of the software – they are likely to disavow all liability and say, “well, you should have updated to the latest version where we fixed it!”
The point is that Cloud-based EDM systems are always up to date. This is because the software doesn’t reside with you. It’s maintained centrally. So as soon as a new version of the software is released, it’s updated – and you get the benefit of it immediately. The cost of doing this is baked into the cost of the service so that it’s not a hidden or un-budgeted cost.
2. Increases in support fees
As mentioned above, the costs of using and maintaining On Premise EDM software can be higher both for the company using it – and for the company that writes it. Because of this, it’s not unusual for software companies to charge increased support fees for maintenance as well as software upgrades. Punitive on-premise support fees can be an increasingly – and potentially ongoing – nasty surprise to your business if unexpected – potentially costing you much more than the equivalent for Cloud-based support.
If one were to see an on-premise EDM vendor suddenly increase their support fees by, say, a figure significantly higher than inflation, one might infer a couple of possibilities:
- That their costs per client had increased significantly. Realistically, their costs increasing significantly above inflation would most likely mean that they’ve experienced a reduction in their customer base – resulting in smaller economies of scale.
- That the vendor wants to exit the on-premise EDM market and that a sudden hike in support fees is one way of weaning customers off them voluntarily without having to argue about open-ended support contracts.
3. Cyber risk
Our company recently had a case of a customer whose servers were hacked during a holiday period. As a result, their systems had been completely trashed by the time they got back to their offices. They had backups of some of their on-premise data – although it was somewhat out of date. What they didn’t have however was backups of the actual on-premises software that was used to run everything. Fortunately, their ERP, EDM, and AP Automation systems were all cloud-based. So it was a relatively straightforward job to get those systems back up and running and restore access to all their data.
Well, you may ask, what if it had been your systems that had been hacked instead of theirs – that would have been catastrophic, right? Well, there are some very stringent security measures in place to hopefully prevent that in the first place. However, thorough, off-site, daily backups are performed daily should the worst happen and recovery becomes necessary.
4. Physical risk
‘Act of God’ risks such as fire, flooding, etc. and more mundane threats such as theft, accidental damage, technical failure, etc. all fall into the ‘physical risk’ category. You can of course insure for them but any insurance is likely only going to cover the cost of replacement or repair. If you have SLAs with your customers – and even if you don’t – you might find them asking for 3rd-party compensatory damages if their services to their own customers have been affected as a result of an outage. And if those SLAs are significant, those damages might be high.
Better and much cheaper to avoid the loss of customer service altogether. If you’re hosting on-premise, you can of course design for that. You might want a backup server with a failsafe switchover – either in a fireproof and/or waterproof, high-security enclosure – or in an offsite location for safety. Neither of these two options would be particularly cheap.
You can circumvent the risk altogether however by opting for Cloud-based EDM. Cloud-based EDM is effectively a centralised store for multiple users so the cost of the safeguards and security precautions mentioned above are spread over multiple customers – tending to bring the cost per customer down compared with self-implementation.
5. The risk of ‘falling behind’
As mentioned in the ‘Out of date software’ discussion, not updating an on-premise EDM installation with every patch or update presents a risk. But not only is there a risk of not fixing bugs, but there’s also the potential opportunity risk/cost as well.
Perhaps the latest version has some extra features that would have saved you a load of time in terms of onboarding a new client? Or perhaps the latest version uses a new compression technique that would have saved you from having to upgrade your server with extra storage space for another year? Neither of these things represents actual costs to you. But they are lost opportunities and hence opportunity costs. What could you have done with all the saved time when you onboarded the client using the new software? What extra thing could you have bought for the business with the money you saved in not having to upgrade the storage in your server yet?
With Cloud EDM, these issues don’t exist. The updates are done automatically for you centrally at the hosting site. They’ll be done outside of work hours (so you don’t have to pay overtime for your IT team to do the same) and typically with advance notice to you to make sure they can still schedule it to minimise any impact.
Ok, so you’ve decided to move your ERP system to Cloud. When is the best time to do it? Perhaps when it’s due to upgrade anyway? Maybe when you’re due to have to upgrade your infrastructure?
And how will it all work once it’s done? Will it be seamless? Will you have some sort of backup plan when you transition? What’s the best implementation plan?
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