ERP in the cloud-Everyone is moving to the cloud, no doubt about it. How to take advantage of the cloud is the multi-million dollar question. Get stampeded into making the wrong decision, and you could wind up throwing away millions. Do it right, and the payoff can be immense.
Not everything in the cloud is automatically better and cheaper and more innovative. While great efficiencies are possible, it’s also easy to overprovision unneeded capacity or allow unmonitored services to balloon out of control because you’ve configured them to scale up automatically. You can subscribe to Software as a Service applications that lock you into using that vendor forever after, or that make it very difficult to switch.
Even for cloud products that have positive-sounding words like ‘autonomous’ or ‘elastic’ baked into their names, success is not automatic. You must make sure these services aren’t stretching you in a direction you don’t want to go.
Understanding the full range of cloud deployment options is particularly important in the context of ERP, where vendors have been playing up SaaS incarnations of their platforms as the quick-and-easy option. Before you follow the path of least resistance, consider your alternatives.
1. Use SaaS where it makes sense
I’ve already suggested there may be drawbacks to SaaS. ERPs take a lot of blood, sweat, and tears to implement and perfect, ultimately becoming the ‘heart and brain’ of the organization. Moving to a SaaS ERP, even from the same vendor, means potentially throwing away years of work on customizations and integrations that may not meet the vendor’s, our your, definition of ‘best practices’.
Worse, you may also find that some of your most business-critical ERP applications, such as shop floor automation and supply chain management, do not have equally capable SaaS equivalents.
Nevertheless, you may decide that the benefits outweigh the drawbacks in specific, high-impact functions. Even if you won’t move the whole company, SaaS ERP might make sense for a division, a newly acquired company, or your distributed salesforce.
2. Lift and shift trusted applications
Many of our clients are more satisfied than not with their current ERP and would rather invest their time and talent in other, revenue-producing applications.
Those who don’t think their organization needs a heart transplant still may conclude it needs to build new muscles. They can begin running their existing ERPs (customizations and all) on cloud infrastructure and gradually weave in other cloud services.
I disagree with those who disparage this ‘lift and shift’ strategy for moving an existing ERP to cloud hosting – even if the application itself remains more or less unchanged. For example, one of our clients achieved better performance with cloud hosting its Oracle EBS system, partly because the cloud provider set them up on its latest and greatest server hardware. Now they no longer worry about replacing and refreshing hardware, and achieving high availability. In addition, disaster recovery (a capability they never had before) is just a matter of taking advantage of the cloud provider’s distributed architecture.