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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.

“One of the benefits of leveraging SaaS providers is that you are not patching systems, buying new hardware, doing capacity management, database structure changes and upgrades—you don’t have to manage the entire stack,” says Strout. “Operationally we spend significantly less time focused on infrastructure and instead are focused on how we drive value out of the application layer.” That value is done through configuration rather than custom code or user exits, which allows more time for value-added activities.

The planning process

Cox says that Oracle encourages its customers to begin its hybrid ERP planning by evaluating what it has and then doing an infrastructure assessment to learn what’s needed. “How does that assessment marry with their definition of their new business requirements? Then, what business functions does it make sense to move to the cloud and in what timeframe?,” he asks.

A company that’s seeing a lot of disruption in its industry will make different decisions about what to move to the cloud than one in a stable industry. “We’re seeing two primary patterns: complete transformation and then innovating at the edge,” says Cox.

“If business transformation is the immediate imperative, then organizations will be looking to make fundamental changes in their IT infrastructure, which includes moving to cloud ERP. But if you’re in an environment that recognizes there’s disruption coming your way in the future, then it’s possible to 'innovate at the edge’ by beginning the transformation through the adoption of cloud applications for planning and budgeting or procurement. Then it’s a strategic question of what do we do next,” he says. “But it’s important to bear in mind that today’s ‘next’ is different: Many organizations adopting cloud by innovating at the edge will manage multiple parallel implementations to speed the transformations required.”

Denecken sees three distinct requirements that are essential to evaluating these hybrid ERP considerations and creating a roadmap. Most important, you need the people who run the business to actively participate. “Without those guys, you shouldn’t even start to define a hybrid strategy,” he says. Next are the enterprise architects because they understand the vendor and solution landscape. Third, you need to know the status of the preconfigured cloud-based approach in respect to functionality and integration scenarios.

“You shouldn’t go back to the drawing board and come up with waterfall approach and say ‘This is what we can do with a hybrid scenario,” says Denecken. “You should right away start with a pre-packaged cloud-based best practice approach.”

Flexibility vs. complexity

A hybrid environment provides a far greater amount of flexibility for companies when they need to scale up the business or move into new areas. That flexibility comes at a cost in terms of integration requirements and managing that integration through solution updates.

 

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