ERPs and the coming cloud revolution

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ERPs cloud revolutionChange awaits some of the most hallowed ground in enterprise technology: enterprise resource plan (ERP) software and systems.

ERP systems, many of which come from Oracle and SAP, are the glue that binds corporations. ERPs manage and integrate vital systems of record in areas such as planning, purchasing, sales, finance and human resources. These systems are 10-ton rigs; the dreadnoughts of corporate IT.

So important are ERPs that many chief information and chief technology officers consider them sacrosanct. After all, such systems have taken blood, sweat, tears and considerable investment to implement over the years. The prevailing attitude is, “Don’t mess with my ERP.”

However, these days, when I talk with clients about their ERPs, I sense a cultural shift resulting from the power and possibilities of cloud technology.

Cloud is a route, not a destination. It uses data as a natural resource to drive competitive advantage. To make use of data, corporate innovators use cloud tools and processes of their own choosing. They work across whatever platforms they want and retain the option to adapt and pivot. On a practical level, innovators are looking to manage more complex data and workflow integrations by bridging cloud and on-premises architectures.

These innovators also want to heal the big pain points of ERP: the high cost of ownership, the complexity that defeats quick scaling, slow application development and a shortage of specialized skills.

One of the best approaches to the ERP challenge is outsourcing with a cloud managed services (CMS) strategy. With a fully managed cloud service, a CMS provider can build and manage the infrastructure. It can also manage operating systems, patching, backup, middleware and other functions.

Are you a candidate for a managed ERP solution on cloud? In my experience, many organizations that move their ERP systems to the cloud are in one or more of the following situations:

  • They want to drive costs out of their infrastructure, particularly when it’s time to replace hardware.
  • They’re consolidating systems onto the cloud and want take advantage of its capabilities.
  • They need a new or revamped ERP system and don’t want to invest the capital to do it on premises.
  • They don’t have the people or skills to implement and maintain the most robust ERP solution.

There are other reasons to take advantage of ERP in the cloud. It’s ideal for setting up new locations or quickly deploying to new overseas markets. With cloud ERP, you could even eliminate traditional offices. It also makes collaboration easier among internal staff, partners and clients across geographies.

Let me be clear: moving ERP to the cloud is not simply flipping a switch. It’s complex, particularly data migration. Integrating cloud with your on-premises infrastructure can be equally challenging. Carefully consider cloud’s impact not just on your ERP environment, but on employees and business processes as well.

Working with an experienced implementation partner to develop a roadmap can help navigate the move from on-premises ERP to cloud. For example, we have clients that ask us to host their entire SAP or Oracle landscapes, including production and support systems. We also work with some large companies not yet ready to put their gigantic and global production systems in the cloud, so they keep their production environments in-house, but run the rest of the ancillary support systems in the cloud.

Regardless of the way enterprises choose their future ERP journeys, the digital revolution promises new innovations and value as those organizations move to the cloud.

Learn more about IBM Cloud Managed Services.

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