It seems like everybody is rushing to migrate to cloud applications, and you don't want to get left on the wrong side of an inflection curve. But there are pitfalls for hasty cloud migration, so it's important to sit back and fully analyze what you've got and where you want to go.
Early in 2016, the ERP world was shocked by reports of Gartner projecting a near-hundred percent failure rate of cloud ERP projects through 2018. The headlines may have been a little more dramatic than Gartner anticipated, but it certainly drove home the point that we're at an inflection point with ERP and cloud that most organizations are not equipped to deal with.
Gartner's own report is more illuminating and makes the case that the increasing complexity of the ERP application portfolio is spiraling out of control: "Gartner predicts that through 2018, 90 percent of organizations will lack a postmodern application integration strategy and execution ability, resulting in integration disorder, greater complexity, and cost."
Post-modern ERP systems, explains SiliconANGLE's Mike Wheatley, "are those which are federated and loosely coupled, and no longer provided by a single provider like Oracle or SAP." In summary: Don't count on your ERP vendor to pave an easy path to the cloud.
Customers Left Scrambling
"There's a dawning recognition that post-modern ERP is 'no quick nirvana' with companies moving from on-prem to cloud lacking [the] skills to integrate applications," writes Gavin Clarke in The Register. "Mistakenly, they assume the vendors peddling cloud will take care of it. When inevitably they don't, customers are the ones left scrambling."
Peter M. Färbinger, editor-in-chief of E-3 Magazine, the independent journal for the SAP community, argues that "fulfilling the needs of SAP clients can no longer be achieved with one single tool, solution, or organization."
According to Färbinger, there is "no choice for businesses but to courageously dive into a bimodal, hybrid business model for their own IT infrastructure-outdated concepts need to be abandoned to make room for agility and innovation. CRM can come from the cloud. The platform may include a database like HANA. The IoT may arise in collaboration with market partners. Service and support don't need to be provided by the manufacturer."
Faced with such issues, it's easy to fall prey to "analysis paralysis." But inaction is not a strategy for success. Thankfully, there are many resources available to illuminate the path to migration and warnings about common missteps to avoid. Here's a quick resource guide:
- Technology consultant Kurt Marko offers eight common mistake to avoid in a GCN article, ending with the caution that "distance and geography still matter. Applications moving a lot of data or managing client UIs will perform better if the cloud service has data centers or zones near your facilities."
- The cloud is more than just cheap storage, Computerworld's Sharon Gaudin points out in her list of five pitfalls to avoid. "The issue is that the cloud is much more than just picking up an application or data and dropping it in the cloud. The real benefit to the enterprise is taking advantage of cloud services, like mobile back-end services and performance management services."
- Don't underestimate the amount of work required in integration, writes ZDNet's Alison DeNisco, in highlighting advise from industry experts. "Many organizations are layering cloud solutions on top of legacy systems and software, so it's key to ensure that the solution chosen is able to be integrated with your existing systems."
- Finally, "Businesses considering cloud adoption should carefully examine the benefits and risks, as well as learning about best practices for cloud deployments," Datamation's Cynthia Harvey offers up in an insightful adoption guide.
Integration Efforts Pay Off
Cloud technology is all about enabling choice. But, let's face it, vendors of legacy enterprise applications historically have been focused on limiting choice by locking customers into long-term relationships that are hard to sever.
Allocating precious resources to integration efforts that ease migration of legacy applications to hybrid cloud environments will pay off in choice and opportunity to innovate at your pace, rather than any particular vendor's preferred roadmap. Relying on one preferred vendor to set your pace to the cloud can only end up costing you in terms of forced upgrades for unneeded features, hefty maintenance and support fees and limited flexibility.
CIO.com Executive Brief: A Strategic Timeline for Next-Generation ERP
Today's rapidly changing technology landscape and the onset of the "Hybrid IT Era" are driving the vision for a next-generation ERP platform. Read this CIO.com executive brief to understand how IT organizations can seize the opportunity to enable IT-driven business transformation.
Pete Bartolik, Guest Blogger
Mr. Bartolik has researched and written about technology and vertical market segments for many years and has worked on many market research, writing and social media projects. He was news editor of the IT management publication, Computerworld and a reporter for a daily newspaper.