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Hybrid ERP matures as companies develop better strategies

Michael Nadeau | Feb. 23, 2017
Developing new strategies to ensure that cloud and on-premises ERP systems play nice together is just one part of the hybrid challenge.

Sabre understood this, having used cloud products such as Salesforce and being a provider of cloud-based software for the travel industry. “One of the challenges with SaaS providers is that they are continuously updating their software. As a customer, you have to continuously improve your process to absorb those changes and be able to take advantage of any new value being generated,” says Steve Strout, vice president of corporate systems at Sabre. “For me, that was one of the strategic things we wanted to accomplish—how do we train our business to take new feature/functions on a regular basis? That changes the role of our IT organization. How do we make sure the business is actually going faster and getting to new data?”

“From a culture perspective, continuously looking to adopt new capabilities was a big change,” says Strout. “Looking at connected data in a different way gives you reporting and analytics that allow you to see things faster because it doesn’t take as long to assemble data from different providers. This has allowed us to change a lot of our financial constructs so we have customer- and product-level P&Ls that are more meaningful.”

ERP vendors report that the trend for new deployments is toward the cloud. About 70 percent of new Microsoft Dynamics CRM and ERP enterprise customers are choosing the cloud option, according to Umran Hasan, senior marketing manager, Microsoft Dynamics 365. “The cloud connection ensures data aggregation, financial reporting, intelligence, backup and disaster recovery, and more,” he adds.

“The question [for our customers] is, ‘How much of our workload do we put in the cloud?’” says Sven Denecken, senior vice president of product management, co-innovation, and packaging for SAP S/4HANA at SAP. “We see the trajectory [toward cloud] going up really, really fast.” He added that any consumer-facing application is almost always cloud-based, and that HR applications are also rapidly moving to the cloud. He believes that finance applications are next in line to go to the cloud on a large scale.

“We see growing interest in the classic two-tier ERP if you can support the semantic integrity. If the hub and spoke model is compatible, that not only saves cost when exchanging or recompiling data, it also helps in the long term because you are comparing apples to apples.” Denecken adds,“It isn’t about feature/function. It’s really this idea that [organizations] need to define how their approach to a hybrid model should be taken forward.” Integration should be at the core of that discussion, as is the ability to perform on a platform-as-a-service (PaaS) model.

Platform was top of mind for Sabre when it began the transformation of its SAP ERP system to a hybrid model. “We wanted to build a platform that allowed us to leverage not only the financial systems but also have the capability to plug in SaaS providers, because that allows us to speed up our ability to deliver new value back into the business,” says Strout.


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