Organizations are more likely to migrate their ERP solutions to the cloud than they are to take advantage of the cost savings and reduced complexity they can realize by consolidating multiple systems. That’s one of the key findings in a new survey conducted for Rimini Street by UK business technology publisher Computing.
ERP environments often turn into sprawling and complex solutions that may not fully meet organizations’ needs, but many organizations have been hesitant to change their ERP setup, for fear of disrupting day-to-day operations. That’s changing, although many taking the cloud route are overlooking the opportunity to reduce costs and complexity through consolidation.
Almost all those surveyed indicated their ERPs are already cloud-based, or heading that way, with 29% having completed the journey, 31% currently rolling out their migrations, and another 29% in the incubation/trial or planning phases.
Slightly more than a third indicated they are taking a “lift and shift” approach to cloud migration, while 43% firmly indicated they were not taking the approach of simply migrating an exact copy of a workload or application from one environment to another. And 21% said they’re unsure of what approach they are taking.
The survey, however, suggests that many are not taking the opportunity to optimize their solutions, with 54% of survey participants not having combined multiple ERP systems and databases onto a single ERP platform.
Benefits and challenges of consolidation
Consolidating multiple ERP systems and databases onto a single ERP platform can help organizations reduce complexity, optimize support and maintenance, and lower costs, enabling them to extract more value from their ERP setups.
While consolidation is not a cure-all, it can reduce licensing costs — instead of paying for two or more systems, you only pay for one. Additionally, because there are fewer systems to maintain, upgrade, and support, you can free up resources for more productive purposes.
Among those taking the consolidation route, the top perceived benefits are:
- Increasing operational efficiency: 36%
- Supporting business transformation: 32%
- Reducing support costs: 31%
- Improving customer and/or employee experience: 30%
- Modernization of infrastructure and applications: 29%
- Reducing complexity/simplifying hybrid application architecture: 28%
But consolidation can be a challenge. Survey participants indicated that among the top barriers and issues encountered during the effort are:
- Difficulties meeting the needs of everyone in the organization: 38%
- High costs: 37%
- A lack of relevant skills: 35%
- Customization replacement issues: 28%
- Data migration: 27%
Internal resource issues
Given the difficulties of ERP consolidation, 56% making the effort have turned to third-party companies for assistance with tasks such as technical maintenance and support, customizations and interfaces, project management, and application management services.
Only 15% felt strongly that they had sufficient internal resources to carry out their ERP consolidation plans, while 36% somewhat believed so. This indicates that a significant number of IT leaders have concerns when it comes to resourcing ERP consolidation plans.
Don’t settle for “easy” approaches
ERPs generally are complex and critical to daily operations. So the “lift and shift” approach to cloud migration may be appealing to those seeking to minimize the risk of downtime.
However, don’t let this approach to the cloud lull you into perpetuating the complexity of your organization’s ERP in a new environment. That can prevent you from achieving greater savings and optimizing the solution to better meet desired goals.
Consolidation, while rarely a picnic, can deliver cost efficiencies, simplified technology, and other important benefits. It provides the opportunity to reduce your technology footprint and explore the advanced functionality needed to unleash innovation.
While the task may seem daunting, Rimini Street can provide comprehensive software support and managed services to overcome the challenges and obstacles of ERP consolidation. For more information, read the full survey report from Computing, “Cure your ERP headaches through consolidation and third-party support.”
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