Why consider migrating your ERP to the cloud?

Services August 22 Resolve Tech Solutions

The modern enterprise is staring at a staggering number of nearly simultaneous technological innovations. Some organizations are rethinking their business strategies to leverage the unstructured data that is already available with them. Others are revamping their entire operating models to leverage emerging technologies such as blockchain and IoT. Others still are tiptoeing around Artificial Intelligence and Machine Learning, unsure about how to utilize them in their operations. All these technological innovations are in the backdrop of new market forces that are creating pressure for greater speed, business effectiveness, and organizational agility. [1]

However, a large percentage of business globally have long-term investments in legacy ERP systems, with some contracts going out as far as 2025 [2]. Naturally, this limits the ability of the organizations to adapt and leverage the modern technologies within their legacy system landscape, apart from incurring much technical debt. 

Breaking this impasse requires that organizations shun the piecemeal approach to ERP upgrades. Instead, organizations must view the cloud-based ERP as a viable option for accelerating enterprise transformation. The cloud-based ERP not only optimizes workflows across the organizations and improves IT efficiencies, but also helps organizations experiment with and adopt innovation acceleratorsfrom enterprise software providers. These accelerators are significantly easier to experiment with on the cloud than in any on-premise solution. With cloud-based ERP solutions, organizations can take better charge of their innovation programs. They no longer need to rely on complex in-house R&D to understand emerging technologies; instead, they can readily integrate their ERP with next-gen solutions from vendors. 

CIOs have traditionally viewed cloud adoption as a cost-efficiency game – perhaps it would help them incur a low TCO, improve the IT efficiencies, and optimize support processes. With time, however, it is becoming evident that the cloud is not merely about deploying apps and databases remotely, but also can play a strategic role in shaping an organization’s innovation strategy.

Of course, embarking on a cloud strategy is not without challenges and moving an entire ERP to the cloud can be a daunting experience for most companies. Thankfully, cloud adoption need not be an all-or-nothing game. Many ERP providers allow for hybrid approaches for organizations who may not want to switch to the cloud completely. 

Providers like SAP have gone a step ahead and are allowing enterprises to choose different models for their cloud deployments:

  • Software-as-a-service (SaaS): Organizations with limited IT manpower can subscribe to centrally managed business applications. These applications could be related to specific lines of business, such as Cloud CRM and Cloud Procurement, or may be more horizontal in nature, such as Cloud Analytics.
  • Platform-as-a-service (PaaS): Organizations willing to invest in IT manpower could build & deploy cloud applications on the SAP Cloud Platform. They could also try and buy apps from SAP partners thus expanding the scope for innovation in their enterprise. 
  • Infrastructure-as-a-service (IaaS): Organizations who need the same level of control as in an on-premise deployment could use the SAP HANA Enterprise cloud (SAP HEC). With this, organizations could eliminate the need for IT infrastructure management while maintaining oversight on all other aspects – functionality, technology, integration, and releases. 

Future posts will discuss some SAP’s cloud offering and deployment options in more detail. 


References

  1. IDC Technology Spotlight, Intelligent ERP, Innovating Through the Gridlock, Feb 2019
  2. The Definitive Guide to Value Creation with the Intelligent ERP Cloud, © SAP SE or an SAP affiliate company