ERP on Cloud Is Fast Mov­ing To The Main­stream

Or­ga­ni­za­tional mind­sets to­wards cloud based ERP have changed dra­mat­i­cally of late, and in the last 18-24 months we have seen wide­spread adop­tion of ERP on the cloud

Dataquest - - C9ONTENTS - (The au­thor is As­so­ciate Vice Pres­i­dent- Prod­uct and Ser­vices, Net­magic (An NTT Com­mu­ni­ca­tions Com­pany)

The move­ment of cloud ERP to the main­stream seems to be global. An­a­lysts ex­pect the global cloud ERP mar­ket to grow rapidly, with mar­ket size pro­jec­tions vary­ing be­tween USD 25 bn to USD 30 bn over the next four or five years.

While the con­cept has been around for some time, or­ga­ni­za­tional mind­sets to­wards cloud based ERP have changed dra­mat­i­cally of late, and in the last 18-24 months we have seen wide­spread adop­tion of ERP on the cloud – whether it’s Mi­crosoft Dy­nam­ics / Nav­i­sion, or SAP HANA / ECC on HANA. A num­ber of fac­tors are re­spon­si­ble for this shift.

MUCH OF THE AP­PLI­CA­TION ECOSYS­TEM IS AL­READY ON THE CLOUD

Cloud-based ap­pli­ca­tions are steadily re­plac­ing on­premise legacy sys­tems across the en­tire spec­trum of busi­ness pro­cesses – cus­tomer-fac­ing web ap­pli­ca­tions, CRM, HRM, doc­u­men­ta­tion, re­port­ing and an­a­lyt­ics, project man­age­ment, are ap­pli­ca­tions that are steadily be­ing mi­grated from on-premise en­vi­ron­ments to the Cloud.

In fact, or­ga­ni­za­tions that may have al­ready moved these ‘less mis­sion-crit­i­cal’ web-cen­tric ap­pli­ca­tions into the cloud, it makes great sense to have their ERP fol­low suit to en­sure min­i­mum la­tency be­tween ap­pli­ca­tions, im­prove

an­a­lyt­ics and re­port­ing, lever­age com­mon se­cu­rity pro­to­cols and drive greater cost and per­for­mance ef­fi­cien­cies.

And while it still makes sense for some ap­pli­ca­tions to stay on-premise (for cost, com­pli­ance, or legacy rea­sons) it’s equally sen­si­ble to move web-en­abled ap­pli­ca­tions to the cloud. Work­ing with a CSP that pro­vides a seam­less, ex­ten­si­ble Hy­brid Cloud al­lows cus­tomers the best of both worlds.

UN­DER­STAND­ING THAT PROCESS STAN­DARD­IZA­TION EN­ABLES EVO­LU­TION

When we talk about process stan­dard­iza­tion, it’s im­por­tant to un­der­stand the dis­tinc­tion be­tween cloud-based ERPs (such as typ­i­cally of­fered by SaaS providers like Salesforce and Azure) ver­sus legacy ERP ap­pli­ca­tions that are now cloud-ready. The former in­volves a whole­sale adop­tion of your Cloud ERP provider’s pro­cesses and sys­tems, while the latter al­lows or­ga­ni­za­tions to main­tain a large amount of au­ton­omy and cus­tomiza­tion in their pro­cesses and work­flows while still be­ing able to lever­age ben­e­fits of the Cloud.

Both ap­proaches come with their own in­di­vid­ual set of ben­e­fits and con­straints, but busi­ness lead­ers are quickly re­al­iz­ing that process transformation or stan­dard­iza­tion is a small price to pay to en­sure that their busi­ness mod­els evolve quickly and keep up with mar­ket dy­nam­ics. The ben­e­fit of op­er­a­tional agility, cost ef­fi­cien­cies and tech­nol­ogy ac­cess out­weigh the ini­tial pain of hav­ing to mi­grate from legacy sys­tems.

A STRONGER, MORE CRED­I­BLE CSP ECOSYS­TEM

Lead­ing ERP com­pa­nies are play­ing their part by cer­ti­fy­ing CSPs and OEMs. For many or­ga­ni­za­tions, cer­ti­fied ar­chi­tec­ture gives them the much needed as­sur­ance from their CSP’s on avail­abil­ity, se­cu­rity, com­pli­ance and per­for­mance. With a stronger, more re­li­able and ven­dor-sup­ported CSP in­fra­struc­ture, or­ga­ni­za­tions have started mi­grat­ing mis­sion-crit­i­cal ap­pli­ca­tions like ERP into the Cloud.

CIOs are now con­tent to validate a CSPs cre­den­tials, en­sure ad­e­quate SLAs around up­time, se­cu­rity and per­for­mance, and then plunge in. This is a sound strat­egy pro­vided you have (a) ad­e­quately val­i­dated the CSPs cre­den­tials within the com­mu­nity, and (b) en­sured that you’ve signed a con­tract that truly af­fords you with the ben­e­fits of the cloud – pay-per-use, no lock-ins, elas­tic­ity, and ac­cess to a wide range of that can be con­sumed a-la-carte.

CLOUD- BASED ERP HAS PROVEN BEN­E­FITS, AND FEWER CON­CERNS TO­DAY

Over the last two years we’ve seen fewer con­ver­sa­tional road­blocks when CIOs and CSPs dis­cuss se­cu­rity and per­for­mance in the Cloud. De­vel­op­ments in se­cu­rity tech­nol­ogy and in­creas­ing cus­tomer aware­ness have seen clichéd se­cu­rity con­cerns largely ad­dressed.

CIOs are now con­tent to validate a CSP’S cre­den­tials, en­sure ad­e­quate SLAs around up­time, se­cu­rity and per­for­mance, and then plunge in. This is a sound strat­egy pro­vided you have (a) ad­e­quately val­i­dated the CSPs cre­den­tials within the com­mu­nity and (b) en­sured that you’ve signed a con­tract that truly af­fords you with the ben­e­fits of the Cloud – pay-per-use, no lock-ins, elas­tic­ity, and ac­cess to a wide range of that can be con­sumed a-la-carte.

These fun­da­men­tals re­main the same re­gard­less of the ap­pli­ca­tion that’s mov­ing into the cloud. Sure, a mis­sion­crit­i­cal ap­pli­ca­tion like ERP would in­volve greater due dili­gence than some­thing pe­riph­eral like say, HR, but the ba­sic re­quire­ments re­main largely the same.

CSPs are pro­vid­ing new-gen­er­a­tion ser­vices like SAP HANA in an on-de­mand, flex­i­ble, pay-per-use model that al­lows or­ga­ni­za­tions to ac­cel­er­ate their time to mar­ket with­out hav­ing to in­vest up front in com­plex hard­ware and soft­ware li­censes. CSPs like Net­magic of­fer a SAP HANA ‘TDI’ (Tai­lored Dat­a­cen­ter In­te­gra­tion, a fancy name for what is es­sen­tially an on-de­mand, pay-per-use SAP HANA model that se­lect CSPs can of­fer af­ter be­ing cer­ti­fied by SAP to do so) model along­side the more tra­di­tional HANA Ap­pli­ance model, thus al­low­ing cus­tomers the op­tion of go­ing the ap­pli­ance route, the Cloud route, or a Hy­brid amal­ga­ma­tion of both.

Cus­tomers with ex­ist­ing ERP de­ploy­ments can lever­age ad­di­tional ca­pac­ity on by us­ing Cloud ex­ten­sions to add to ex­ist­ing ca­pa­bil­i­ties seam­lessly and with­out be­ing bound to long term con­tracts. Of course, a mis­sion­crit­i­cal ap­pli­ca­tion like ERP would in­volve greater due dili­gence and se­cu­rity con­trols com­pared to a pe­riph­eral ap­pli­ca­tion. How­ever, best-in-class CSPs to­day more than ad­e­quately ad­dress en­ter­prise con­cerns around se­cu­rity, avail­abil­ity, in­te­gra­tion and con­fig­ura­bil­ity, even for com­plex, mis­sion crit­i­cal ap­pli­ca­tions like ERPs.

The ben­e­fits of ERP on cloud, of course, are sig­nif­i­cant. Cloud-based ERPs are prov­ing to be much ahead of on­premise ERPs in many other ar­eas such as scal­a­bil­ity, up­grades and time-to-mar­ket. With bet­ter user ex­pe­ri­ences, seam­less up­grades and ex­tended fea­tures like mo­bile com­pat­i­bil­ity, cloud-based ERP de­ploy­ments are catch­ing up quickly with their on-premise coun­ter­parts.

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