ERP Data in the Cloud -Benefits and Concerns
At their best, ERP leaders, including Microsoft Dynamics and SAP Cloud ERP, are reshaping data-driven decision making.
At Vertical Circle we work primarily with SAP and Microsoft. Here are a few high-level thoughts based on (sometimes challenging) experiences.
When I was teaching ERP Strategy to grad students, I would always begin the semester with two main premises:
ERP is not software: it’s a container for main organizational processes, as well as a platform for connecting, them leading to efficiency and profits
ERP is NOT a database, it organizes data.
Basic stuff, right? Except these concepts sometimes seemed tricky, not just to my students but also to some clients. Ultimately, for me the true test of an organization “getting it” is when ERP becomes a way to pull people and process silos, from purchasing to finance, together rather than wedge them apart. The old “difficult but simple” phrase.
And so often, for me it comes back to a “Prime Directive”: Respect the data.
Moving ERP data to the cloud is still not always the best way for large companies, but it’s safe to say that for SMEs it certainly is. After massive changes in IT infrastructure and architecture, the leading platforms have made it not easy, but manageable and smart to get ERP and its data into the cloud.
Looking briefly at Microsoft and SAP:
(Yes there are many other great ERP providers, we’re just going to stick with these two today)
the former, thanks to the Nordic roots of its main components, is more organically “cloudy”, while the latter has had a longer road after the launch of S/4HANA in 2025 (TEN years ago!).
But both SAP and Microsoft have made tremendous progress with their cloud offerings, and while their paths are decidedly different, and businesses will decide which ERP is best for them, these solutions have very similar and strong visions!
Thanks to more open architectures and data structures, Cloud ERP provides ecosystems where clients can focus much less on IT wizardry and much MORE on the benefits of continuously improving processes and real-time reporting and analytics.
In other words, they vastly improve our capability to Decide And Act.
Benefits
1) Accelerated real-time visibility across the business
When your data is housed correctly in a cloud environment, for example Fabric/OneLake or the Business Technology Platform (BTP), automation with reporting (queries, joins to views) is typically much easier.
This includes MRP/MPS and advanced logistics planning.
Faster month-end and quarter-end close
Real-time tracking of revenue, expenses, and cash flow
Immediate insight into supply chain disruptions or demand changes
Management dashboards that reflect what’s happening now, not last week
2) Simplification of scalability and IT investment models!
3) Improved analytics, reporting and BI integration
Cloud ERP platforms are designed to integrate natively with modern analytics tools.
Microsoft Dynamics 365 connects seamlessly with Power BI, Azure Synapse, and the broader Microsoft data ecosystem.
SAP integrates with SAP Analytics Cloud, as well as third-party BI tools through cloud connectors and data services.
Centralized, “single source of truth” ERP data
Faster dashboard development and iteration
Reduced reliance on complex on-prem reporting servers
Self-service analytics for finance, operations, and leadership teams
Instead of pulling flat files or building fragile pipelines, teams can analyze ERP data directly from the cloud with confidence and consistency.
4) Leverage more open architecture
ERP providers have done massive work to simplify and improve the strength of data connections. One great example: the significant table reductions in HANA. These improvements are cleanly integrated into their cloud solutions, ready to be exploited.
5) Enhanced Security, Compliance, Reliability
Security is often cited as a concern — but in reality, cloud ERP platforms typically offer stronger security controls than most on-prem setups.
Both Microsoft and SAP invest heavily in all components of professional redundant security.
For ERP data, this translates to:
Reduced risk of data loss or downtime
Better auditability and access tracking
Higher system availability and resilience
6) Advanced analytics
With Cloud ERP, we can say goodbye to most proprietary programming hurdles and integrate with standard languages such as Python/R/Julia. Cash flow predictions, complex supply chains, product success predictions, all is greatly enabled for machine learning and AI.
Summary: Caution advised but looking good!
In summary, putting all ERP data in the cloud is not for everyone, but thanks to massive investments and clear strategies by SAP, MS, Oracle and others, the advantages are of course compelling. Obviously, for small and medium companies we are in no-brainer territory.
For large companies, the standard concerns about Data Security, changing architecture investment models and migration project quality apply, but at this point it’s more a question of organizational readiness.
Happy Friday from Vertical Circle!