Why Your On-Prem ERP Places Your Business at Risk

Enhanced Security and Compliance:

As a Southern CPA who has primarily focused on implementing ERP systems for over twenty years, I’m here to advise you that while your trusted on-prem ERP system may have served you well in the past, it may be time to consider a change.

And not just any change—I’m talking about migrating to a modern, cloud-based solution like Microsoft Dynamics 365 Business Central.

Data is the lifeblood of a company.

Whether you’re managing financials, customer information, or day-to-day operations, your ERP system is central to it all.

The world of finance has evolved.

I’m here to share why switching to a cloud-based system, like Microsoft Dynamics 365 Business Central, could be one of the best decisions you’ll make for your business.

Now, before you stop reading and think, “We’ve been running this system for years, and it works just fine,” let me go into detail why an older on-premises ERP may be putting your business at serious risk – especially when it comes to security, compliance, and maintenance.

1. The Changing Landscape of Cybersecurity

The world isn’t the same place it was ten or even five years ago. Cyber threats are evolving, and hackers are becoming more sophisticated by the day.

Just like you wouldn’t leave your front door wide open at night, you shouldn’t expose your business data with outdated security measures.

The assumption is often that on-premises ERP systems are safer because your data is physically within your control. But the reality is quite different.

Now, on-premises systems may feel safe because they’re within the four walls of your building, but they can be more vulnerable than you think.

Why?

Because maintaining up-to-date security requires a constant investment of time, resources, and expertise—something that many midsized businesses simply can’t afford to do on their own.

Cyberattacks have grown in sophistication and frequency, and maintaining the necessary defenses against them is no small task.

For midsized companies, keeping pace with the latest security protocols, patches, and updates is resource-intensive, and quite frankly, most in-house IT departments are stretched thin.

One missed update or vulnerability can expose your business to a serious data breach, costing millions in lost revenue, fines, and damage to your reputation.

That’s where Microsoft Dynamics 365 Business Central shines. With a cloud-based solution, you benefit from enterprise-grade security, monitored around the clock by cybersecurity experts at Microsoft.

I am not talking about just having data stored in the cloud—it’s about having your data protected by some of the most advanced security systems in the world. It’s like having the security system of a big fancy house but without the hefty price tag.

We’re talking advanced encryption, multi-factor authentication, and constantly monitoring threats through AI-driven security technologies.

Even better, Microsoft performs automatic backups and maintains copies of your data in multiple locations, so even in the event of a hardware failure, your data remains safe and accessible.

Microsoft employs swift detection and response mechanisms to mitigate damage and restore security in the unlikely event of a breach.

For a business running an on-premises ERP, handling such an event could be a logistical nightmare, requiring specialized expertise and tools that can be costly and difficult to implement quickly.

Remember that with Business Central, you benefit from Microsoft’s global network. Your data is stored in secure data centers worldwide, protected by cutting-edge security protocols that meet or exceed industry standards.

2. The High Cost of Security Breaches

Let me paint a little picture for you. Imagine you’re a business owner in a small Southern town, and one day, you discover that your on-premises ERP has been breached.

Your customers’ sensitive information has been stolen, and your reputation is on the line. Not only do you have to deal with the immediate financial loss, but you also face the risk of lawsuits, regulatory fines, and long-term damage to your business’s credibility.

The cost of a security breach can be astronomical, especially for a midsized company. According to recent studies, the average cost of a data breach in 2023 was over $4 million. That’s a number that could put many companies out of business.

With a modern cloud ERP like Business Central, you significantly reduce the risk of a costly breach.

Microsoft invests billions of dollars annually in cybersecurity to protect their customers’ data. That’s not something your in-house IT team can match.

3. Regulatory Compliance and Your On-Premises ERP

Let’s talk about compliance for a minute, because if you’re in business, you know how important it is to stay compliant while being able to focus on your core business.  

The compliance landscape is becoming more complex every year. And if your ERP system doesn’t help you stay compliant, you could be in for some trouble.

On-premises ERPs often struggle to keep up with the ever-changing regulatory environment. Every time a new law or regulation is introduced, your IT team must scramble to update your system, ensuring it meets the latest requirements.

That’s not only time-consuming, but it also opens the door to human error. And in the world of compliance, even a tiny mistake can lead to considerable penalties.

On the other hand, Dynamics Business Central is designed to keep you compliant with the latest regulations.

Microsoft regularly updates the system to ensure it meets the most up-to-date standards for security and compliance. Whether considering data protection laws like GDPR or financial regulations like SOX, Business Central has you covered.

Furthermore, with built-in audit trails and reporting features, you’ll have the tools you need to demonstrate compliance to regulators. You’ll be able to track changes, monitor user activity, and ensure that your data is always handled in accordance with the law.

4. Disaster Recovery: What Happens When Things Go Wrong?

As someone who’s weathered more than a few Southern storms, I can tell you that disaster recovery is something you never want to skimp on.

Whether it’s a hurricane, a fire, or a cyber-attack, things can go wrong when you least expect it. And when they do, your on-premises ERP system may be unable to handle the fallout.

If your on-premises system goes down, you could look at days, weeks, or even months of downtime. That’s lost revenue, lost productivity, and lost opportunities. And in some cases, you may never be able to recover your data entirely.

With a cloud-based system like Business Central, disaster recovery is built-in. Your data is automatically backed up and stored in multiple locations, so even if one data center goes down, your information is safe and accessible. Microsoft’s data centers have redundant power, cooling, and networking systems to ensure maximum uptime.

In the event of a disaster, you can quickly restore your system and get back to business. That peace of mind alone is worth the investment.

5. Scalability and Flexibility: Growing with Your Business

Now, I know what you’re thinking. “But we’re just a midsized company. Do we need all that fancy cloud technology?” Please let me advise you: As your business grows, your ERP needs will grow as well. What works for you today may not work for you tomorrow.

On-premises ERPs are notoriously difficult and expensive to scale. If you need more storage or computing power, you’ll have to buy new hardware, which can take weeks to install and configure. And that’s assuming you have the budget for it. When it becomes clear that what you have today is not working it may be time to look for a better solution.

On the other hand, Business Central is designed to grow with your business. As a cloud-based solution, it can quickly scale up or down based on your needs. If you need more resources, they’re just a few clicks away. And because you only pay for what you use, you won’t be stuck paying for expensive hardware you don’t need.

Plus, Business Central is flexible enough to adapt to your business’s unique processes. Whether in manufacturing, retail, or professional services, you can customize the system to meet your needs.

And because it’s built on the Microsoft platform, it integrates seamlessly with other Microsoft products like Office 365 and Power BI, giving you a unified, end-to-end solution.

6. Cost Considerations: Is It Worth It?

Some of you say, “But we’ve already invested so much in our on-premises ERP like Microsoft Dynamic GP. How can we justify the cost of migrating to the cloud?”

Well, let me put it to you this way. The cost of maintaining an outdated system can far outweigh the cost of upgrading to a modern solution.

With an on-premises system, you’re responsible for maintaining the hardware, software, security, upgrades, and backups. And as your system ages, those costs only go up – not to mention the potential cost of a security breach or compliance violation.

Business Central operates on a subscription-based model. You only pay for what you use, and Microsoft handles all the maintenance, security, and updates. That means you can focus on running your business instead of worrying about your IT infrastructure.

And when you factor in the potential savings from avoiding a costly security breach, staying compliant with regulations, and reducing downtime, the ROI on a cloud-based ERP becomes crystal clear.

Conclusion: The Time to Act is Now

I’m not saying your on-premises ERP system is terrible. But the world is changing, and the risks of staying with an outdated system are too great to ignore.

From enhanced security and compliance to disaster recovery and scalability, Microsoft Dynamics 365 Business Central offers a solution to help your business thrive.

So, if you’re ready to protect your business and secure your future, it might be time to bid farewell to your vulnerable on-premises ERP and say hello to the cloud.

Act now and give your business the security, flexibility, and peace of mind it deserves.

About

DLD Business Solutions empowers businesses with intelligent, efficient solutions that drive success. For over 23 years, we’ve been a trusted partner, delivering expert implementation, migration, and support services for Microsoft Dynamics ERP systems. Whether you’re optimizing operations, boosting sales, or gaining valuable financial and operational insights, we’ve got you covered.

What sets us apart? We listen. Our accountants, CPAs, developers, and network specialists work closely with you to tailor solutions that fit your unique needs using the latest Microsoft technologies. From migrating you from Dynamics GP to cloud-based Dynamics 365 Business Central to optimizing your entire business, we provide real-world solutions and long-term support to help your business thrive.