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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.

Denecken stresses the importance of balancing the agility and flexibility that hybrid ERP provides with the complexity. “In a pure on-premise environment, the solutions are considered along the status quo. On the opposite side, if you use a pre-configured cloud solution, you adopt your business processes to a standard because you want to simplify your approach.”

With a hybrid ERP, Denecken says you don’t have the extremes at both ends. The balance is in being able to use the cloud to redefine your processes to enable fast innovation while preserving the knowledge that depends on your in-house systems.

Cox sees greater use of the cloud simplifying ERP support and management overall. He cited four principles of transformation: simplify, standardize (so there’s one definition of a given process across the organization), centralize and automate. “All simplify the management of systems,” he says. “One of the prime reasons for adopting the cloud is to avoid infrastructure and the time and effort of on-premise upgrades.”

Looking ahead

While the end game for many companies could be a pure cloud solution, the industry consensus is that it will not happen on a large scale anytime soon. Where it’s happening now is with companies that are implementing an ERP system for the first time. In fact, Hasan says that most of its Dynamics 365 for Operations customers are opting for a cloud-only solution.

ERP vendors are taking a cloud-first approach to development, but expect to develop and maintain their on-premise options indefinitely. With Microsoft Dynamics 365 for Operations, for example, customers can run their entire business operations on-premise locally or through distributed systems.

“To give organizations a single view of the business and the ability to capitalize on synergies between the sites, it is essential to aggregate data in the Microsoft cloud to report and process financials and manage enterprise data centrally,” says Hasan. “The elastic compute power, artificial intelligence, and speed of innovation of the cloud enriches the on-premises systems in a way that would be very difficult to realize in a totally disconnected system.”

“I haven’t spoken to a single customer who doesn’t understand the need to embrace the cloud. There’s a new vision for organizations that’s come out of the environment that we’re in. Digital transformation, disruption in every industry, the global talent shortage, the rise of robots, the radical changes in many traditional professions [due to software-enabled automation], and ever increasing customer expectations produce volatility in the business model. And there’s a new vision for the IT infrastructure to support the new organization. You can only achieve the innovation required to meet changing customer expectations by leveraging the cloud,” says Cox.

Strout sees Sabre being able to react better to market conditions because of its hybrid system. “It’s about what we need to focus on in the future. What we need more information on. What skills do we match to a product,” he says.“We can do those things within the environment. Want to get to a place where we are continuously learning and adapting the platform.”

 

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