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Cloud ERP: The rising alternative to hosting your own

Esther Shein | Sept. 7, 2017
CIOs faced with brittle on-premises ERP systems and the desire to free up valuable IT resources are increasingly looking to the cloud as a reliable, scalable solution for their ERP needs.

It’s not an either-or proposition, he adds. “The reason a lot of people were dissatisfied with their ERP system [was because] the decision was not ‘Should I buy from one or two vendors’ — if you were an Oracle shop you bought from Oracle. Often, that meant you had a functional app that didn’t suit the needs of the business, so you had to customize a solution and that leads you down a very bad path.”

By contrast, most cloud vendors allow you to extend a suite without having to modify the code, Guay adds.

Human resources systems, for example, are a natural fit for the cloud because there is not a tremendous amount of integration required for them to work with other systems, he says. In that case, an organization might opt to buy its financials and HR systems from the same vendor. It’s important to look at the functionality the systems provide and determine whether they have so much data flowing between the two that it makes sense to get the components from the same vendor, or if they can buy standalone systems, he says.

 

The ins and outs of cloud ERP migration

The decision to migrate off-premises was clear-cut for the San Diego Tourism Authority, which had been using Oracle’s basic ERP system for about 10 years. By 2016, the system needed upgrading, but the non-profit organization didn’t have the money, says Isabel Sauerbrey, vice president of information technology and operations at the tourism authority.

At the same time, Sauerbrey was tasked with eliminating $200,000 from her operating budget. After looking at systems from a few vendors, the tourism authority opted to migrate to Oracle Cloud. “Between servers and hosting, it was much cheaper [to go to the cloud] than what I had,’’ she says. “So it really was a financial benefit to us.”

The tourism authority was using Sitecore for its website, which was integrated with its Simpleview CRM system, and IT had also done some customizations. The system was hosted by a third-party managed services provider because they didn’t have the infrastructure to manage it internally, she says.

“We decided everything finance-related we’d move to the cloud and integrate data between the website or the CRM system with the Oracle ERP system, using Oracle APIs,” she says. At the same time, IT did a major cleanup. “After 10 years you have a lot of stuff you think you need but don’t, and we were able to simplify a lot of processes,’’ says Sauerbrey. “It was a big project. The [move to the] cloud was probably the easiest part.”

The hard part was figuring out what data to get rid of and dismantling a massive website in an effort to simplify it by keeping only the most important components, she says. “We cut a lot of the customizations we do that were on the website, and CRM features.”

 

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