According to Gartner, by 2021, 55% of Oracle’s on-premises customers will have moved 80% of their on-premises capabilities to Oracle Cloud Applications. Customers are looking at increased speed of delivery as one of the key benefits of cloud ERP.
Key Challenges
- Upgrading an ERP solution for strictly technical reasons may cause more business disruption than benefits delivered. It may also result in a missed opportunity to leverage new capabilities.
- Legacy ERP customizations that addressed gaps in functionality may inhibit the effectiveness of moving to a cloud ERP solution, delaying the expected realization of benefits.
- Moving all or part of the application portfolio to the cloud stresses traditional file-based, point-to-point integrations, reducing system reliability and increasing maintenance costs.
- Most customers using on-premises ERP applications are not ready for the amount and rate of change that a Cloud upgrade program brings. Lack of preparedness can delay and derail an ERP initiative.
Recommendations for CIOs to consider:
1. Position your ERP upgrade as an opportunity to provide tools for business transformation.
• Organizations that treat a move to the cloud strictly as a technical process risk losing out on business transformation opportunities like artificial intelligence (AI) applications, chatbots and conversational interfaces, advanced predicative analytics and machine learning (ML).
• Consider: Can the business and my IT organization absorb the amount of change that comes with changing ERP applications?
2. Minimize ERP costs by rationalizing all customizations. Document and evaluate the current business need, and attach a value metric to each customization and integration.
• Customizations often create a roadblock to the ability to upgrade or intake new features delivered in feature packs or updates. Replacing customizations is reported as the second highest requirement when implementing a new ERP solution.
• Consider: What is the business value of each customization in the current ERP? How should I adapt my governance and change management policies to prioritize standardized processes?
3. Deliver end-to-end business process support by developing an integration strategy that incorporates multiple integration tools and master data management.
• An integration strategy will determine the platform and methods that the enterprise will use to integrate your ERP with other cloud or on-premises systems.
• Consider: What systems outside of the ERP can dictate how they should integrate, so that common methods and patterns can be adopted throughout the enterprise.
4. Prepare your organization for the amount and rate of change by adopting a product management philosophy for ERP.
• Analysis phases, testing phases and training phases require customer involvement. To get the best value, CIOs must transform the business and IT to support continuous cycles of analysis, testing, training and delivery that coincide with application update releases.
• Consider: Business analysts and business process owners will be needed to develop internal product roadmaps. Business users and testing teams will be required to test the quarterly updates. You may even need to consider a governance committee to approve testing of updates and adoption of new features.
Source: Gartner, Oracle
