How to Safely Migrate your ERP to the Cloud in Three Steps

Transcription

1 How to Safely Migrate your ERP to the Cloud in Three Steps

2 Introduction Enterprise Resource Planning (ERP) has served as the central nervous system of large organisations for the past two decades. The ERP system controls everything from accounting, human resources and manufacturing to order processing, supply chain and customer relationship management. Yet despite its fundamental importance, many ERP systems are no longer fit for the demands of modern business. In a world where speed and agility are everything, they ve become a millstone around the corporate neck. Complexity is the biggest problem. Your business has probably been involved in mergers and acquisitions over the years, which has meant finding workarounds to get different systems to talk to each other. Some ERP functions have been customised to meet your specific needs but the people who implemented those changes may not be around anymore. Change is difficult to manage and time consuming, which in turn leads to higher costs and strangles innovation. The IT department spends too much time keeping the lights on and has slowly been losing business relevance. Business users have grown increasingly frustrated by the lack of access to functions they need and are actively bypassing the IT department to find them. The relationship between business and IT needs to be reset. 2

3 THE CLOUD ATTRACTION Cloud looks like an attractive proposition because it removes the complexity of customisation, introduces a subscription model and delivers the agility your business craves. Now you can react more quickly to new market opportunities and potential threats, closing the gap between what the business needs and what IT can deliver. These are the main benefits: Support & Maintenance These systems cost less to support than internal systems and, because updates are pushed out automatically and continuously, there are no upgrades or maintenance tasks for the IT department to worry about. Driving innovation Lower costs compared to traditional IT investment frees up budget for more valuable activities that deliver competitive advantage. You also get the benefit of new features and functionalities from continuous research and development. Improved integration Other key technologies like mobile, social and collaboration are easier to integrate with cloud-based systems. This delivers significant productivity benefits, especially when your organisation has a highly mobile workforce. Decision Support As well as enabling greater collaboration, your business will also benefit from contextual analytics that support real-time decisions. This is where the modern battle for competitive advantage will be won and lost. Business transformation Cloud-based ERP improves operational efficiency and reduces complexity while increasing the accuracy, transparency and visibility of data. Staff can access business information wherever and whenever they need it on any device. 3

4 YOUR ROADMAP TO ERP CLOUD Although there are many significant benefits of moving your ERP systems to the cloud, these major projects are notoriously difficult to get right. The path to a brighter future is littered with expensive disasters Gartner research estimates that up to 75% of ERP projects fail to meet their objectives. Any cloud migration needs to start with a comprehensive review of business strategy and must be broken down into manageable chunks. This is a three-stage journey: Understanding The Current You need to start by building a clear picture of your business needs and where your current ERP systems are deficient. Which modules are being using and what infrastructure are they sitting on? Where are the business functionality gaps? How many users do you have and what s the licensing position? What are the current performance metrics around your infrastructure and applications? Collect data from your systems to understand whether you re putting a strain on existing infrastructure or rattling around inside the hardware with tons of spare capacity. Then extract a list of every customisation and objectively review what s important (and what s not). Work out what it s costing to keep your current environment up and running and what it s going to cost in the next planning cycle. Does any infrastructure need replacing? What are the support contracts like? Are there any governance restrictions you need to consider? This creates a base footprint of where your business is today. Now that you have an idea of how your business is going to evolve in the next three to five years, will your systems support that vision? 4

5 Defining The Destination Now it s time to think about where your business is trying to go, irrespective of any IT limitations. Every company has its own planning cycle but it s difficult (and potentially dangerous) to look more than five years ahead when considering IT strategy. What business changes are likely to impact on your requirements during that time and how can you prepare for them? Maybe there are plans to buy a competitor or purchase new capability in an adjacent field. What are your growth targets and how quickly will you need to scale if you hit or exceed them? Look at the components available in a cloudbased structure and work out the best mix of internal and cloud resources based on your current capability, operational requirements and capacity to handle change. Define the endpoint roadmap and document how it s going to look. This includes whether you need to acquire or consolidate infrastructure and applications. Now work out the costing model and compare with what it s costing to keep your current environment up and running. Moving everything across to the cloud is likely to simplify integration and engagement with suppliers whereas the increased complexity of a hybrid engagement model might add layers. In either case the fundamental objective is moving control from the IT department to business operational needs. If you want to run a new marketing campaign, you ll have the flexibility to consume more cloud without having to ask IT for help. There s a catalogue of services to draw from with instructions on how to buy, manage and use them. Or let s say your business wants to build something but doesn t have the necessary project management software. To implement, configure and get it running would traditionally be a costly exercise. Now that it s a service your time to market for developing that product is significantly reduced. Of course you still have to understand what you need and go through due diligence but you re able to act on your requirements much more quickly. It removes barriers while enabling agility, flexibility and scalability. 5

6 Planning The Journey So you ve built an accurate picture of your current environment, laid out a vision for the next three to five years and identified the capability gaps that need to be closed by moving your ERP to the cloud. But this is a once-in-ageneration project so you need to get it right. A Deloitte CIO survey found these were the top five barriers to a successful ERP journey: 82% Resistance to change 72% 65% Inadequate sponsorship Unrealistic expectations 54% 46% Poor project management Case for change not compelling 6

7 You need support to ensure you arrive in one piece so you can start reaping the benefits as quickly as possible. Getting the most from this transition requires an open and transparent relationship with your integrator. Now that you re ready to plan the journey, there are a few key considerations: Consumption models Business users can now consume services at their discretion, scaling infrastructure up and down as changing circumstances dictate. Traditionally you needed to buy infrastructure to meet maximum demand and the site crashed if you underestimated. Impact on the IT team In the new cloud model the IT team must become service brokers to the business, adding value by managing service level agreements across multiple vendors. IT is only there to facilitate interaction with vendors so they need to change how they add value to the business. Vendor relationships These are significantly different in the cloud. Traditionally you had a number of vendors providing hardware, networking, applications, databases and so on. The cloud reduces complexity by taking out a lot of these layers but it also means you have less control. Where you previously dictated terms, now the vendor is telling you how you re going to operate. What to move and when Is it better to do a staged implementation with multiple phases or to move everything at once? Are there any quick wins that will help your business embrace the new model before you move the bulk of operations? A combination of factors like the maturity of your business and its ability to assimilate change will dictate the best approach for you. 7

8 Summary The benefits of moving your ERP to the cloud are compelling reduced complexity and improved agility enable innovation, while consumption-based pricing aligns costs with business requirements. It will have an impact on what you control so you need to consider whether going all in is the right move for your business right now. Finally, this is a once-in-a-generation move with the potential to transform your business so you need to get it right. Failure to do so is likely to hurt every bit as much as sitting still. Oakton is an award-winning Oracle Gold Partner. We offer a comprehensive portfolio of technology and consultancy services across Database, ERP, OPA and Analytics. With Oakton s Oracle ERP roadmap consulting, our clients benefit from a clear, actionable and tailored journey to the cloud. Please contact us to learn more about how Oakton can help you reduce cost, increase agility and accelerate your business with our Oracle services: Melbourne Sydney Brisbane Perth Canberra