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Rethinking ERP cloud migrations in the age of AI and IoT

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The flight path from your legacy ERP vendor’s on-premises software to a cloud version needn’t be linear. In fact, you may want to rethink the entire route.

Most companies stick with their ERP system longer than people stay with their first spouse, which statistics estimate to be about eight years. Given the commitment involved, a move to an ERP cloud platform needs to be carefully planned, based not only on what your company needs today, but on a vision for the future.

Brian Sommer, founder of technology advisory firm TechVentive in Carmel, Ind., pulls no punches when he talks about the problems with traditional ERP vendors’ cloud offerings. He urges his clients to rethink their use of legacy ERP vendors because modern adaptations born in the cloud integrate AI and IoT capabilities and provide what businesses will need to compete in the years ahead.

“Companies need to kick the tires on new vendors and think about how their competitors will use new technologies against their firm,” he said. “Your competitors will use IoT and AI to make sure their machines are always running, and they could kill you in the market if you don’t have the same advantages.”

The idea of ditching a highly integrated, customized ERP system is daunting, for sure. Business leaders view their ERP as the center of the universe. It’s where all of their transactional and operational data lives. But Sommer makes the point that business needs have changed, and data isn’t confined to the factory floor anymore.

“Roll the clock forward, and there is vast info that exists outside the four walls of the enterprise,” Sommer said. “You need systems that are designed for this new era, rather than systems designed for the old world. You need to be aware of what’s available. Look at the new vendors out there; don’t reward old vendors who continue to sell old, tired products.”

ERP cloud considerations

Indeed, organizations are questioning their allegiance to mega-ERP vendors due to high costs and frustration with those vendors and their inability to meet strategic needs as well as their lack of agility.

In TechTarget’s 2018 IT Priorities Survey of IT executives, managers, analysts, architects and engineers at North American companies, 39% said they’d planned to implement or upgrade their ERP systems, and from the looks of the survey data, most of those rollouts will take place in the cloud. In the survey, 29% of respondents said they planned to deploy ERP in the cloud, compared to just 10% who planned to implement business apps on premises.

From my years covering cloud computing, I’ve seen how SMBs view cloud as a fast way to launch business applications without investing in complex IT systems. Large companies using multiple, interconnected systems see a move to the cloud as a way to untangle them and cut costs. But none of those benefits really apply to ERP cloud migrations.

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Article Credit: TechTarget

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